Electronic delivery of documents in bankruptcy and liquidation – continued
In my earlier comments trying to work out why we now have unharmonized drafting approaches and rules for electronic service of insolvency documents, depending on whether corporate or personal insolvency is involved, I said I had asked relevant agencies in Canberra and that when any thoughtful reply arrived, I would report it. Electronic delivery of […]
Corporate Collective Investment Vehicles
The government is consulting on a Bill in line with what it says is its commitment “to establishing a commercially viable regime for corporate collective investment vehicles (CCIVs) from 1 July 2022. A CCIV is an investment vehicle with a corporate structure – designed to be an alternative to a trust-based managed investment scheme”. Corporate Collective […]
UK insolvency practitioners – “evidence of intimidation, deception, dishonesty and even misappropriation of assets”?
A very critical report on the insolvency profession in the UK – Resolving-Insolvency-APPG-on-Fair-Business-Banking-and-Humphries-Kerstetter.pdf (appgbanking.org.uk) has come from the All Party Parliamentary Group on Fair Business Banking, of September 2021. The dramatic opening lines of the report are these: The production of this report has been a sobering experience. We started out aware of a number […]
Reinventing the Australian Insolvency System
At a seminar on 4 August 2021, Jason Harris and I presented our ideas on reform of the insolvency system in Australia, which we have been developing for some time, including in our text book, Keay’s Insolvency++. We are saying that the state needs to take on a greater role in the structure and operation […]
Australian personal insolvency and small business reform in the wake of Covid
An overseas publisher has asked me to give an update on the latest in small business bankruptcy law in Australia, for a comparative article, the publisher asking what was the outcome of the various reforms in Australia proposed earlier in the year. That prompted me to review the state of play and come up with […]
Judicial impartiality report awaits the High Court decision in Charisteas – more dancing on pinheads
Following a recent Australian Law Reform Commission seminar – Impartiality from both sides of the Bench | ALRC – held on 19 July 2021, the ALRC advised that the “next progress points” for its inquiry are the judgment of the High Court of Australia in Charisteas[1] and the publication of the ALRC’s final report. That […]
Australia’s review of its insolvency safe harbour – more than a few issues to consider, but in the end, about not much
The terms of reference and what is called a ‘discussion paper’[1] for this review under s 588HA have been released, although the intention of the law is best found in the 2017 explanatory memorandum[2] which gives a range of examples and types of business that might use the law. Further background is found in the […]
Objections to a bankrupt’s 3 year discharge in Australia – mixed messages and unfair law
Apart from Australian law imposing a long period for a person to be subject to the restrictions and stigma of bankruptcy, of 3 years, it allows trustees to extend that period of time, up to 8 years, and based on some rather mixed messages and perhaps unfair law. Objections to discharge A trustee may lodge […]
You call that a lockdown? Australia’s bankruptcy laws
If those in small business think the lockdowns are tough, for weeks or even months at a time, the government has a much longer lockdown for them if their business happens to succumb to the financial pressures and they find themselves bankrupt. While bankruptcy is sold as being able to “release you from most debts, […]
ASIC’s corporate plan, and the 27 August hearing before the PJC
With ASIC having appeared before the Parliamentary Joint Committee on Corporations and Financial Services on 27 August 2021, ASIC’s Corporate Plan 2021-25 has also just been published which outlines its priorities over the next four years. It is said to be consistent with ASIC’s new Statement of Intent released in response to the Australian Government’s […]
Review of Australia’s safe harbour protection from insolvent trading – remember s 588HA [updated]
The federal government has finally made arrangements to have Australia’s “safe harbour” from insolvent trading law reviewed – s 588GA, introduced in September 2017. But the review must be wider than the media release issued? The minister’s media release? The minister’s media people have him say that the panel will be required to “determine if […]
What do creditors get from ‘successful’ recovery actions by insolvency practitioners?
A Judge has ordered that Trustees in bankruptcy file “evidence that identifies the benefits the creditors of the bankrupt estate are likely to receive if the Trustees succeed” in the voidable transaction claims being brought. That was ordered in the particular circumstances of the case, but it would be a useful order for judges to […]
Cleaning up after failed oil and mining operations – new New Zealand laws, and other ideas
The cost of environmental clean-up of mining and other resource projects where the company has gone into liquidation is a live issue in Australia, with the on-going issues following the liquidation of the Northern Oil and Gas Australia (NOGA) group of companies, and with similar issues in New Zealand, and elsewhere internationally. NZ is introducing […]
The contributions of bankruptcy trustees to AFSA’s regulation of criminal conduct
Bankruptcy trustees, and liquidators, and creditors in insolvencies, contribute much to the government, in effect for free. In a recent bankruptcy disciplinary decision, the Sydney trustee’s plea, apparently in mitigation, that he had ‘assisted’ the Inspector-General by way of giving evidence in a bankruptcy prosecution, in Launceston, Tasmania, was given little value. The committee saw […]
Bankruptcy – transfer of files from the Official Receiver to private registered trustees, with 20% to women
Australia’s AFSA has announced that since 29 July 2021, it has changed the way it allocates bankrupt estates to bankruptcy trustees working in the private sector. Changes to AFSA’s approach to transferring matters | Australian Financial Security Authority. This includes allocating 20% of matters to women trustees. AFSA says that its “main priority as the […]
The high cost of ASIC’s regulation of liquidators, in a deregulatory environment
The proposed annual ASIC ‘industry levies’ imposed on liquidators in Australia, to fund the cost of their regulation, prompts this brief comparison with what Australian bankruptcy trustees pay, and insolvency practitioners in the UK and New Zealand. This coincides with the Prime Minister’s push for greater deregulation. ASIC and liquidators Australia’s corporate regulator, ASIC, has […]
Assigning bankruptcy claims to a former trustee
A 5 day bankruptcy hearing was cancelled in March 2021, in relation to matters occurring in 2012, being challenged in a 2014 bankruptcy by way of recovery actions being brought in 2019. This cancellation followed the suspension in February 2021 by AFSA of the registration of the trustee litigant in the action, in relation to […]
Winding up Forum Finance
In ordering that liquidators be appointed to Forum Finance Pty Ltd on 9 July 2021, the Federal Court explained the nature of a winding up on the just and equitable ground, and its history. Westpac had applied for the appointment of provisional liquidators both on the ground of insolvency, under Part 5.4 of the Corporations […]
Insolvency practitioner charge-out rates – the cost of carrying the State
In making a winding up order against Forum Finance,[1] Justice Michael Lee made this comment about the hourly fees of the proposed liquidators: “24 … The prevailing rate for partners of insolvency firms doing this work has reached a stage (one might be forgiven to think somewhat remarkably) where a practitioner can charge $847 (inclusive of GST) in […]
Employees’ redundancy rights on the insolvency of their employer
There are now a number of decisions from the Administrative Appeals Tribunal reviewing decisions of the Fair Entitlements Guarantee where the question is whether an employee whose employment was terminated as a result of the business going into liquidation is entitled to a redundancy payment from FEG. Unless the right to redundancy is contained in […]
Cross-border insolvency protection of a ship on its way to Australia
An Italian shipping company – Michele Bottiglieri Armatore SpA – which is subject to Italian restructuring protection, a concordato preventivo – has successfully obtained a stay in Australia against the arrest by a creditor of one of its vessels – MBA Giovanni – which is due to arrive in Australia imminently, if it hasn’t already. […]
The insolvency rule in ex parte James – another in a series of cases ‘dancing on pinheads’
A trustee in bankruptcy in England rejected a £5.7m proof of debt lodged by the revenue authority [HMRC][1] on what was found to be a technical though correct point of law. This raised what the Deputy Insolvency and Companies Judge said was “an interesting issue concerning the interaction between revenue and insolvency law in relation […]
Australian small business insolvency law – a review
Several stars aligning at the end of 2020-2021 prompt this review of where Australia is at in the area of small business insolvency law. Small business is presently much in focus, positively, with World MSME Day celebrations[1] and the Small Business Ombudsman promoting its economic contributions – accounting for over 97% of businesses, employing over […]
Regulatory penalties
Sanctions imposed by courts for breaches of competition or regulatory laws have to tread a line between being so severe as to put an otherwise worthwhile company out of business, but severe enough for the purposes of deterrence and reprobation. Focus on the future of the company as impacted by the financial cost of the […]