The need for a new process for the appointment of insolvency practitioners?
A Judge has expressed concern about the processes for the appointment of insolvency practitioners, suggesting adverse relationships with their lawyers, leading to an abdication of adherence to their duties by practitioners in favour of the pursuit of a “profitable administration”. There is much law and policy background as to issues of independence, remuneration and professional […]
Insolvency trends – should they be higher?
Recent figures show trends in insolvencies in Australia – nothing too significant at a macro level though distressing at a personal level. But perhaps they could or should be higher? in 2023-2024, personal insolvencies totaled around 11,600 compared with 37,000 15 years ago. corporate insolvencies totaled about 11,000 out of 3.4 million companies, slightly higher […]
ASIC’s updated guidance on liquidator registration and discipline; AFSA; and the ART
ASIC has released updated regulatory guidance on statutory committee registration and discipline processes, and related issues: see Revised Regulatory Guide 258 Registered liquidators: Registration, ongoing obligations, disciplinary actions and insurance requirements (RG 258). AFSA provides similar guidance. Reviews of committee decisions will be heard by the new Administrative Review Tribunal from 14 October 2024. This is […]
Gender balance in the insolvency industry
With women comprising only around 10% of insolvency practitioners, the issue of gender balance continues to receive attention, among broader issues of diversity in that sector, and in the workforce generally. The Turnaround Management Association (TMA) has recently launched its TMA Voluntary Code for Equitable Insolvency & Restructuring Appointments (EIRA) under which a Code adopter […]
Reviewing liquidators – under review?
ASIC has announced that it has appointed 15 new members to its Reviewing Liquidator Panel, following the expiry of the 5 year terms of the previous panel members.[1] ASIC can appoint a registered liquidator to act as a reviewing liquidator to a company in external administration under section 90-23 of Schedule 2 of the Corporations Act […]
Coercive control and insolvency
ASIC has asked registered liquidators to “stay alert” for signs of family and domestic violence when conducting insolvency administrations.[1] ASIC explains that any behaviour that is violent, threatening, controlling, or is intended to make a person or that person’s family feel scared and unsafe, can be considered as family and domestic violence. An aspect of […]
Liquidator’s sentencing adjourned to 29 November; trustee’s hearing further extended to 15 November
Peter Amos The sentencing of former liquidator Peter Amos was on 13 September adjourned to Friday 29 November 2024. The sort of issues raised by Amos in relation to his sentence are explained in Peter Gosnell’s Insolvency News Online: Amos tells court he was to anxious to ask creditors for cash (insolvencynewsonline.com.au). ============================ Paul Leroy […]
Fees of insolvency practitioners and lawyers
The commentary following was issued on 15 August 2021. It is reissued for historic interest only, perhaps, on the assumption that fee relations between lawyers and IPs have improved in the ensuing three years? After Jason Harris and I wrote about Justice Michael Lee’s comments on the high charge out rates of insolvency practitioners, I […]
Personal insolvency figures up and ‘reforms’ pending
Personal insolvencies increased in July 2024, to 1157 compared with the lows of 851 in June 2024, and 929 in July 2023, according to new provisional monthly statistics released by the Australian Financial Security Authority (AFSA). That’s about .0064% of the adult population. The government’s proposed law reforms include to allow debtors to have 7 […]
ASIC’s civil penalty regime – an academic review
In the midst of a focus on the enforcement activity of ASIC following a critical Senate Committee report,[1] we have an article – Penalty Regimes Enforced by the Australian Securities and Investments Commission [2] – which examines the civil penalty regime under the Corporations Act, the ASIC Act and related legislation, and its history. The […]
ASIC’s revised guidance on insolvency practitioner offence reporting – RG 16
ASIC has issued revised guidance on insolvency practitioner offence reporting obligations – RG 16 External administrators and controllers: Reporting of possible offences and misconduct, September 2024. 2023 PJC Report on Corporate Insolvency recommendation 19 As I fully explained in April 2024 – ASIC’s review of offence reporting – RG 16 – Murrays Legal, this review […]
Insolvency numbers in decline
Numbers of insolvencies of individuals and companies have fallen dramatically over the years, which we may find represents a fundamental shift away from the formal legal processes involved. That is, of the 3.4 million companies in Australia in 2023-2024, only around 11,000 went into some sort of insolvency administration (0.33%). While this exceeded the […]
$364k mistakenly paid by the ATO to a company in liquidation – retain or return?
In a recent case,[1] C88 Project Pty Ltd, a liquidator was ordered by the Court to return tax moneys of $364,267 paid by the ATO to the company in liquidation by mistake. Various issues were raised, including as to the law of mistake, constructive trusts and the particular tax law provisions. [2] The liquidator had properly […]
Splitting ASIC 2024 and the 2010 Senate Committee Report
In the discussions about separating ASIC’s tasks following the July 2024 Senate Economics References Committee report – Australian Securities and Investments Commission – investigation and enforcement, there has been no mention of the same Senate Economics References Committee’s earlier separation recommendation about ASIC in its 2010 report The regulation, registration and remuneration of insolvency practitioners […]
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 | […]
