Some proposed personal insolvency reforms in Australia
With the federal government yet to respond to the PJC Report on corporate insolvency of July 2023, which recommended a general review of both personal and corporate insolvency law, it has nevertheless proceeded to announce personal insolvency reforms and proposals. This may be because the changes involved are fairly routine, and the proposal is consumer […]
Senate report on ASIC’s investigation and enforcement roles – July 2024
The Senate Economics References Committee has issued its Report – Australian Securities and Investments Commission – investigation and enforcement, of 3 July 2024, which is highly critical of ASIC as a corporate regulator and which makes a series of recommendations.[1] One of its main points and recommendations is that ASIC has too much on its […]
“Personal insolvencies increased in May 2024…” – by 3
AFSA reports that “personal insolvencies increased in May 2024”. They did – by 3 more than in April 2024. Personal insolvency numbers increased by only 3 more in May 2024 (1049) than in April 2024 (1046), and only 18 more than in May 2023 (1031). Provisional personal insolvencies increased in May 2024 | Australian Financial […]
The 2023 Parliamentary Joint Committee Report and insolvency law reform?
While the federal government is yet to give its response to the PJC Report on Corporate Insolvency of July 2023, there is little to suggest that the industry and others interested have been working on any of the threshold issues that the Report says need attention to assist any law reform. It is approaching […]
Insolvency practitioners and missing moneys – on-line regulation required
The sentencing hearing in relation to former liquidator Mr Peter Amos was mentioned on 17 June 2024 and was then adjourned for a day’s hearing on 5 August 2024. See “Thousands and thousands of pounds have been lost …” – Murrays Legal According to ASIC, Amos held various insolvency appointments which rendered him an “officer” […]
The bankruptcy trustee and missing funds, continuing
The court hearing of an Australian bankruptcy trustee who may need to explain missing funds has been adjourned without ceremony to August 2024. Proceedings are before the Federal Court concerning former bankruptcy trustee Paul Leroy. The Inspector-General continues to say that his “investigation is ongoing and further details will be provided at an appropriate time”: […]
Personal insolvency numbers suffer a slight rise
There is not much to report from the latest personal insolvency figures, save for continued small increases over time. It seems unlikely that personal insolvencies will quite reach the predicted 12,250 for the 2023-24 year, let alone the long-term average of 23,100. Whether the numbers are ‘soaring’ or ‘surging’ is a matter of interpretation. The […]
Insolvency law terms – what do they mean?
While insolvency law uses many and varied terms to describe its various processes for dealing with an insolvent business, no fewer than six in the UK, we are told, “something is preventing struggling businesses from using it”?! Perhaps because of the very fact that insolvency law does use so many and varied terms to describe […]
Insolvency law’s elephants in the room
Professor Jason Harris and I will be presenting a session at INSOL Academics Colloquium in San Diego USA on 22 May. Consistent with the theme of the INSOL conference, our session is titled ‘rethinking Australian insolvency law’ and comprises much of what we put to the Australian Parliamentary Joint Committee in its Corporate Insolvency inquiry […]
ASIC’s review of offence reporting – RG 16
In response to the PJC Report, although a bit premature, ASIC is reviewing its RG 16, on offence reporting obligations, its consultation paper acknowledging many of the issues raised in the Report, but also awaiting the government’s response to that report: see 24-072MR ASIC consults on misconduct reporting guidance for external administrators and controllers | […]
“Thousands and thousands of pounds have been lost …”
By way of an update to this post, on 11 June 2024 the Federal Court adjourned the 14 June case management hearing in Leroy to 9 August 2024 at 9.30am. No reasons were given. ============================================================ The regulation of insolvency practitioners (IPs) in Australia might come in for scrutiny in light of two current matters involving […]
Bankruptcy and mental ill health
Justice John Logan of the Federal Court has raised some interesting issues in an otherwise straightforward bankruptcy judgment concerning the court’s ability to organise mental health assistance for a bankrupt – a single mother “in a spiralling situation of debt” and “in quite some despair”. LL was made bankrupt by the Federal Circuit Court on […]
Small business sole trader insolvencies
A recent newspaper report on the trend of insolvencies in small business was interesting for the reason that it acknowledged that many or most businesses are run by individual people and not by inanimate companies, and that even if there is a company involved, corporate veil protection of the owners has its limits: Insolvencies up […]
AFCA financial compensation scheme of last resort
The federal government has announced [1] that a compensation scheme for victims of financial services misconduct will start from 2 April 2024, including a Compensation Scheme of Last Resort (CSLR) in the event that the financial service provider is unable to pay a compensation determination against it made by the Australian Financial Complaints Authority (AFCA). […]
Insolvency practitioners as employees
Updated on 5 March 2024 to refer to a 1996 Explanatory Memorandum in bankruptcy which says that, despite the case law, a person’s status as an employee, rather than a partner, should not preclude a person from obtaining registration as a trustee. ====== A liquidator disciplinary committee has decided that conditions should be imposed on a […]
Insolvency Practitioner Registration and Disciplinary Committees
I am pleased to have been appointed by the government as a part‑time member to the Ministerial pool for the Corporate Insolvency Practitioner Registration and Disciplinary Committees, for a three‑year period beginning on 2 March 2024. Appointments – members, Insolvency Practitioner Registration and Disciplinary Committees | Treasury Ministers. These committees sit as required to determine […]
Report on the Franchising Code of Conduct – and insolvent franchisors
Further to my comments of September 2023 below as to a review of the franchising code of conduct, that review has been completed and on 8 February 2024 a report was released. Review of the Franchising Code of Conduct Final Report | Treasury.gov.au, Dr Michael Schaper (“Report”). As I indicated earlier, a review of franchising […]
Offence referrals by liquidators
Offence referrals to ASIC by liquidators continue to be contentious and perhaps distracted by the issue of claimed automated decision-making by ASIC itself, although the main issue of law reform remains in focus. Parliamentary Joint Committee on Corporations and Financial Services At a 3 November 2023 PJC inquiry,[1] Senator Deborah O’Neill, as chair, referred to […]
Cancellation of a bankruptcy trustee’s registration and freezing orders obtained
The registration of Australian bankruptcy trustee Mr Paul Leroy was cancelled by the Inspector-General in Bankruptcy (IGB) on 2 February 2024, effective from 5 February. Federal Court proceedings have been commenced and freezing orders obtained on 2 February appointing Micheletto and Carrafa as joint and several trustees of the bankrupt estate of Katherine Jackson, until […]
Punishment for bankruptcy – wearing a yellow and brown bonnet in the public square
A recent book, Re-examining insolvency law and theory – perspectives for the 21st century, comprises chapters on a wide range of theoretical perspectives on insolvency law – from those of morality, liberalism, tax law, human rights, competing goals and creditor rights, property rights, feminism, and the psychology of law reform. In one chapter – A […]
Personal insolvency figures – December 2023
Numbers of personal insolvencies in Australia continue to fall with the December 2023 figure down to 805 compared with 853 in November 2023. However, December does generally tend to have lower figures. These insolvencies were in the broadly usual proportions of 63% (509) bankruptcies, 36% (289) debt agreements, and 1% (7) personal insolvency agreements. A […]
New corporate definitions of director, officer and asset
Following the ALRC’s work on Ch 7 of the Corporations Act, attention has already been given to legislative changes tidying up the Act across a range of sections. There are consequential changes made in other laws, but not those that fall outside the Treasury portfolio. See the Treasury Laws Amendment (2023 Law Improvement Package No. […]
Corporations Act redrafting – ch 5?
Some years ago, I suggested to a Treasury officer that Ch 5 of the Corporations Act be redrafted and simplified. The curt response was, “you think Ch 5’s difficult – check out Ch 7”. That was no doubt correct. Chapter 7 is the subject of the ALRC’s Confronting Complexity: Reforming Corporations and Financial Services Legislation – […]
The new Administrative Review Tribunal and law for the relief of insolvent debtors
On 7 December 2023, the government introduced legislation that would abolish the Administrative Appeals Tribunal (AAT) and establish what it terms “a new, fit-for purpose administrative review body, to be named the Administrative Review Tribunal (the ART)”. Parliamentary committees are inquiring into the relevant Bills with the safeguards against political appointees to the ART coming […]
