Insolvency law reform – conference paper
This is the paper given by Professor Jason Harris and myself at the Society of Corporate Law Academics (SCOLA) conference on 4 July 2022, at the University of the Sunshine Coast. It concerns our views that the insolvency system in Australia needs re-thinking, before any attention is given to reform of the insolvency laws operating […]
Association of Independent Insolvency Practitioners’ Third National Insolvency Conference
“Are you ready to rumble” in the insolvency jungle was the opening question at the Association of Independent Insolvency Practitioners conference at the Hyatt Hotel in Canberra on 23-24 June 2022 and those two days were indeed a ringside rumble with 150 participants taken through many contentious issues in current insolvency practice. Opening on Thursday […]
Can insolvency practitioners afford to be generous?
The Australian bankruptcy regulator, AFSA, has published what it terms a series of “exemplar behaviour case studies [to] showcase examples of best practice from the insolvency sector”. One case study raises the issue of how much unremunerated work trustees perform and how and how that is paid for and by whom. In one example, the […]
Insolvency practitioner [over]-regulation in Australia – an update
While the UK is reviewing its insolvency practitioner (IP) co-regulation system, Australia’s direct regulation, with minimal but expansive co-regulation, might also come up for review. In the meantime, New Zealand has settled in to its newly created co-regulation without much ado, or cost. Perhaps we all overthink the issue of IP regulation, or overstate IPs’ […]
Who should pay for the costs of the administration of an insolvency?
A debtor in Australia pays no fee to have themselves made voluntarily bankrupt. If that does not seem odd, then it should be further explained that we are one of the only jurisdictions to impose no fee. But the ‘fee’ to wind up the debtor’s company can be a few thousand dollars. [This post was […]
Personal insolvency law and policy under the new Labor government in Australia
With the Attorney-General Mr Mark Dreyfus QC in the process of picking up police and other responsibilities from the disbanded Home Affairs and deciding upon priorities in his department among anti-corruption, the rule of law, merit-based tribunal appointments and constitutional change, he might also like to reconsider his responsibility for personal insolvency law. Mr Dreyfus […]
“The [too high] costs of insolvency”?
The Age newspaper in Australia has reported on what it describes as the “often extremely heavy” costs in administering insolvencies “which generally come out of the pockets of creditors who have already suffered”. It reports on some work of “extreme simplicity” charged at high rates and it refers to the many fees that “swallow up […]
Insolvency practitioner regulation – an Australian story
With the UK government rethinking the regulation of its insolvency practitioners (IPs), moving away from co-regulation to a system more like Australia’s direct government regulation model, it will be interesting to see in which direction Australia heads with its IP regulation, if at all. Its review of these processes was foreshadowed back in 2015, when […]
Insolvency Law Bulletin – the latest on examinations, liens, receivers, tracing and winding up
Examinations The latest Insolvency Law Bulletin looks at the High Court’s recent decision in Walton v ACN 004 410 833 Limited (formerly Arrium Ltd) (in liq) [2022] HCA 3 extending the scope of the examination power to potential class action plaintiffs – High Court opens the door to extraordinary public examination powers to potential class […]
“National interest insolvencies” – creditors vs the public interest?
At a seminar in London on 11 May 2022 – National Interest Insolvencies – Should these be for the State to manage? – [ Webinars – Reorg ] a decision of the English High Court was discussed where the government Official Receiver was appointed to a failed and hazardous electricity supply company the liquidation of […]
The UK new international economic crime laws – and Australia compared
The UK government has just enacted the Economic Crime (Transparency and Enforcement) Act 2022 which requires overseas entities holding UK real estate to disclose their beneficial owners. It also provides that no overseas entity can be registered at the UK Land Registries as the proprietor of a legal interest in UK land unless it has […]
International insolvency – impact of the Model Law, and more – UNCCA seminar on 27 May 2022
In a recent article on Australian insolvency law reform,[1] Justice Sarah Derrington, as chair of the Australian Law Reform Commission, usefully referred also to cross-border insolvency reform, noting the adoption of the UNCITRAL Model Law on Cross-border Insolvency in 2008, and likening its objectives to those of the 1988 Harmer Report.[2] International perspectives – UNCITRAL, […]
Insolvency disclaimer or state control – furnaces and coke ovens, pyrophoric iron sulphide and methane, effluent lagoons and asbestos …
The High Court of Australia has dismissed the liquidators’ application for special leave to appeal in Australian Sawmilling because the legislation from which it arose has in the meantime been repealed and replaced, hence the application did “not raise an issue of sufficient public importance to warrant the grant of special leave to appeal”.[1] In […]
FEG claim against receivers over circulating assets
The Fair Entitlements Guarantee [FEG] scheme through the Commonwealth has obtained orders delaying the deregistration of a company to allow a claim to be made against receivers for alleged breach of s 433 of the Corporations Act in relation to their treatment of the company’s assets. That section requires a receiver to give priority to […]
UK insolvency review – “better outcomes from insolvency and increased returns to creditors”?
The first and rather glowing report on the operation of the Insolvency (England and Wales) Rules 2016 has been issued by the UK government, showing “better outcomes from insolvency and increased returns to creditors”, such that the “UK’s insolvency regime remains among the best in the world”. But there nothing much to substantiate these comments. […]
Judicial Impartiality Final Report – still under wraps
The Australian Law Reform Commission handed its Judicial Impartiality Final Report to the Attorney-General, Senator Michaelia Cash on 6 December 2021. The report is yet to be released. The ALRC said it “look[s] forward to participating in public discussions on the recommendations in due course”, and no doubt do many others. This Final Report was […]
Bankruptcy law – no need for prior consent to service by email
Bankruptcy law has been changed to allow service by email without asking the person in advance whether they consent to being served by email. This is a concept I have referred to by reference to the Red Flag Act of 1865 when early cars required a man with a red flag to walk ‘60 yards’ […]
Australia’s safe harbour protection from insolvent trading liability, continued
The report on Australia’s safe harbour protection for directors (s 588GA) from what is said to be our strict insolvent trading laws (s 588G) will no doubt please those in the industry for its rigorous legal analysis and precise recommendations, and the preservation of the safe harbour law upon which many a practitioner’s business model […]
What does our insolvency system produce?
Many of us who call for a major review of our insolvency laws must know that the data on the performance of those laws is quite limited, certainly in the area of the majority of insolvencies, the small to medium enterprises (SMEs). The government won’t act. Why would not the industry itself gather and publish […]
Why do we have preference recoveries in insolvency? – updated
The High Court of Australia (Keane and Gleeson JJ) has granted the liquidators special leave to appeal from the Full Federal Court decision abolishing the peak indebtedness rule. “KEANE J: Mr Evans [for the liquidators], I think so far as the importance of the question is concerned, you are probably pushing against an open door […]
Insolvency returns to creditors and other fictions – reissued March 2022
Insolvencies average dividend returns to unsecured creditors of under 5 cents in the dollar, in some cases, under 1 cent. For your unpaid debt of $10,000, you may receive $100, some months or years later. Much of insolvency is based on fiction. I’d like to think that those in my field are familiar with […]
ASIC’s power to wind up abandoned companies – a drop in the ocean?
ASIC has revised its guidance on the exercise of its powers to order the winding up of an abandoned company, noting that “directors sometimes abandon their companies without paying employee entitlements”: RG 242 ASIC’s power to wind up abandoned companies | ASIC – Australian Securities and Investments Commission ASIC wound up 19 such companies in […]
Government’s law reform of schemes of arrangement a “complete waste of resources when the core problem brewing is in the SME market”
Some may agree or not with the “blunt” submission of an Australian liquidator and trustee on the government’s review of schemes of arrangement law as being a “complete waste of resources when the core problem brewing is in the SME market”. The government’s 2021 discussion paper on schemes shows it is working through the next […]
Diversity and inclusion in insolvency
Diversity in the qualifications, experience, knowledge and abilities of those in the insolvency industry is the subject of this article, leaving other aspects of diversity in that sector to those more qualified. With ARITA anticipating International Women’s Day in promoting its own Diversity and Inclusion program,[1] I was prompted to see my own comments on […]
