Annual reports 2022-2023: of ASIC – ‘a deliberate strategy of obfuscation so that the public is kept in the dark ….’? and of AFSA
ASIC’s ASIC Annual Report 2022–23 has been released amidst some recent severe criticism of the quality of its annual reports over the years, in relation to enforcement of director obligations, to the point of suggesting that the reports appear to adopt “a deliberate strategy of obfuscation so that the public is kept in the dark […]
Regulation of firms offering insolvency services
Further to my earlier post on insolvency practitioner (IP) regulation in the UK, and contrary to expectations,[1] the UK government has backed away from replacing the four recognised professional bodies (RPBs) with a single government regulator, for the moment. But it has announced plans to introduce new rules requiring the regulation of insolvency firms, other […]
‘Masculinity contest cultures’, and gender imbalance?
Evidence before the Parliamentary Joint Committee inquiry into Ethics and Professional Accountability [1] (PJC inquiry) may assist in considering the gender imbalance recommendation of the PJC’s July 2023 Report on Corporate Insolvency (PJC Report). A submission made to the PJC inquiry by SCOLA suggests that ‘masculinity contest cultures’ may be a reason for the concerns […]
Voluntary administrators removed as NZ interim liquidators of debtor on independence grounds
Following the appointment by the New Zealand High Court of Australian voluntary administrators of Probis as New Zealand interim liquidators of one of Probis’ creditors, Mars Cap, [see Australian voluntary administrators appointed as New Zealand interim liquidators – Murrays Legal] a director of Mars Cap has successfully had the interim liquidators replaced, because of concerns […]
Insolvent Trading and Minimal Returns to Creditors in Liquidations
This is a brief response to a well-researched and thoughtful article by Associate Professor Mark Wellard – Insolvent Trading: Director Accountability for Minimal Returns to Creditors in Liquidations (2023) 31 Insolv LJ 85. The article refers to comments that Jason Harris and I make about the need to attend to assetless insolvencies, including by way […]
Some insolvency law reform ideas from Scotland and New Zealand
“ … the state is, effectively, paying insolvency practitioners to end the life of small companies … a sub-optimal solution ….” “the standard liquidation process in NZ is simpler and more streamlined than the Australian simplified liquidation process. The new Australian procedure provides no useful model for NZ”. “the statutory regime under the [NZ] Companies […]
ACCC’s new penalty guidelines – some queries
The ACCC has issued new penalty guidelines – Guidelines on ACCC approach to penalties in competition and consumer law matters Three queries from my perspective One, while the guidelines say that there will be cases where a penalty may result in the contravenor becoming insolvent, but the penalty is no greater than is necessary to achieve […]
The cross-border regulation of insolvency practitioners – insights from INSOL Tokyo
I was invited to present at the INSOL International Academic Colloquium on 12 September 2023 in Tokyo on the panel concerning ‘Insolvency Professionals’, along with Dr E Streten (Aus) and Professor J Sugimoto (Japan) and chaired by Professor Charles Booth (USA). My session – the cross-border regulation of insolvency practitioners – generated several useful questions […]
Public interest supports time extension for insolvency recovery action
Litigation claims brought by insolvency practitioners (IPs) are not like the usual commercial claims on behalf of a commercial, or government, client. Despite marginal returns to creditors, there are public interest considerations that can apply, such as the need to enforce the insolvency laws, or even to allow recovery of remuneration. Nevertheless, there is a […]
Australian voluntary administrators appointed as New Zealand interim liquidators
In Insolvency licensing bodies confirmed for New Zealand’s new regulatory regime – Murrays Legal, of August 2020, I explained the new liquidator licensing regime in New Zealand. This requires insolvency practitioners operating in New Zealand to be licensed by an accredited body, being the New Zealand Institute of Chartered Accountants (NZICA). As an accredited body, NZICA […]
Cross-border regulation of insolvency practitioners – INSOL Tokyo – where are the government regulators?
This commentary has now been updated. See The cross-border regulation of insolvency practitioners – Murrays Legal ============================================== I was pleased to speak at the INSOL Academic Colloquium in Tokyo on 12 September 2023 on the extent and nature of regulation of insolvency practitioners when they are outside their home jurisdiction in a capacity as foreign […]
ASIC v Jones [GD Pork] – insolvency practitioner independence and pre-insolvency advice
A court decision concerning insolvency practitioner independence and pre-insolvency advice usefully raises issues recommended for law reform review by the Parliamentary Joint Committee Report on Corporate Insolvency. The WA Court of Appeal has dismissed an appeal by ASIC from a decision concerning the independence of practitioners, and their remuneration. ASIC had unsuccessfully claimed that the […]
Penalising cartel conduct – BlueScope Steel: $57m penalty, net profit $2.8b
The Federal Court has fined BlueScope Steel $57 million for cartel conduct under the Competition and Consumer Act 2010 (Cth) (CCA), after attempting to collude with other companies to adjust the price of steel products in Australia. BlueScope’s former general manager Jason Ellis was also personally fined $575,000 for his role in the scheme. The […]
Marginal annual increase in personal insolvencies said to be in line with high numbers forecast
There was a total of 9,930 personal insolvencies in Australia in the 2022–23 financial year – around 4% higher than the 2021–22 annual figure of 9,545. According to AFSA, “this marginal national increase is in line with forecasts, as we expect to see personal insolvencies revert towards the 10-year average in the next 2 years.” […]
The government halts its Modernising Business Registers Program after an independent review
The federal government has announced it will stop its Modernising Business Registers (MBR) program following independent review findings that the program could not deliver value for money, with massive budget and timeline blowouts: see Review of the Modernising Business Registers Program – Final report | Treasury.gov.au The independent review Report found the MBR program was […]
NZ Supreme Court confirms Mainzeal directors’ liabilities for over NZ$39 million
The Supreme Court of New Zealand has dismissed directors’ appeals from a finding that they must pay over NZ$6 million and up to NZ$39.8 million for breach of the laws against, in Australian terms, insolvent trading. Yan v Mainzeal Property and Construction Limited (in liquidation) [2023] NZSC 113 (25 August 2023) (nzlii.org) The Court said […]
15 years for tax fraud – immoral and illegal
Mr Adam Cranston has been sentenced to 15 years jail for his involvement in conspiracies to deprive the Commissioner of Taxation of over $105m in PAYG and GST taxes.[1] In what appeared to be an explanation for his criminal conduct, Mr Cranston thought that, having worked in insolvency liquidating companies with large tax debts, with […]
ASIC v Bettles – case dismissed, with costs
ASIC has lost a major Federal Court proceeding brought against a senior and experienced liquidator, Jason Bettles, alleging that his conduct “constituted so gross a departure from, and abrogation of, the duties of a registered liquidator, as to warrant” not only the cancellation of his registration as a liquidator but also a lifetime prohibition from […]
PJC Recommendation – Pre-Insolvency Advisers – Part 1: summary
The full article on this topic of 1800 words, for those interested, looks that the PJC Report recommendations about “untrustworthy pre-insolvency advisers”. It is Part 1 of 2, looking first at what ‘trustworthy’ pre-insolvency advice is available. As the PJC says, unlawful operators are more identifiable by the harm they perpetrate rather their job title […]
PJC recommendation – pre-insolvency advisers – Part 1
The PJC Report on Corporate Insolvency 2023 has responded to concerns expressed about “untrustworthy pre-insolvency advisers”, those that are said to offer and facilitate unlawful conduct by debtors to avoid the consequences of insolvency. It found that such operators were “more identifiable by the harm they perpetrate rather their job title or profession”, but that […]
Sunlight on pre-insolvency advisers
Updated 14.8.23: While pondering the 2023 Parliamentary Joint Committee’s recommendations about pre-insolvency advisers, I am reminded to go back to some earlier comments that in any regulation, the commercial and legal environment within which the untrustworthies operate should first be improved before any law changes – the usual regulatory laws, draconian penalties, threats etc – […]
UK personal insolvency reforms – summary of responses and next steps
In my comments of July 2023 following, I reviewed the 2022 call for evidence in the UK on reform of the personal insolvency system. The Australian PJC Report of July 2023 has recommended that there be a comprehensive review of both personal and corporate insolvency. While corporate insolvency received some close review by the PJC, […]
Businesses are rarely neatly arranged when insolvency strikes
While the government is thinking about the various recommendations of the PJC Report[1] about improving our current corporate insolvency laws, I have been trying to find how existing insolvency practice deals with what is often described as the ‘blended’ nature of assets and liabilities of many small businesses. That is, as the Small Business Ombudsman […]
Updates to ASIC insolvency regulatory guides
ASIC is in the process of updating 4 of its regulatory guides on insolvency, in the next few months, and consulting on 2 new ones. These are listed, with some comments made. AFSA also has its set of guidance notes. Proposed changes to Regulatory Guide 258 Registered liquidators: Registration, disciplinary actions and insurance requirements (RG […]