Corporations Amendment (Corporate Insolvency Reforms) Act 2020 No 130 of 2020
This is now law, with a date of assent of 15 December 2020, and with a commencement date for most provisions of 1 January 2021.
Bankruptcy threshold to be increased from $5,000 to $10,000
The Australian government has not been ignoring personal insolvency reform in 2020, despite its recent small business reforms dealing only with the smaller proportion of corporate businesses. The government says it is to increase the personal bankruptcy threshold from $5,000 to $10,000, a reason being that it did not want people being made bankrupt for […]
NZ’s measured review of class actions and litigation funding, noting Australia’s ‘polarised’ debate
The New Zealand Law Commission has commenced a 2 year inquiry into litigation funding and class actions, right at the time that an Australian parliamentary joint committee (PJC) is due to report on that topic on 21 December 2020. The NZLC’s issues paper refers to the ‘polarised’ views in Australia ranging from “poor justice outcomes […]
Does small business count?
This Ombudsman’s follow up report – Small Business Counts – examines small to medium business enterprises (SMEs) from an economics and technology perspective, including as to how SMEs have responded to the COVID-19 impacts. It is quite a useful report, to a point. But it does not tell us much about the legal structures of […]
Australia’s corporate SME insolvency law may soon become law – and then….
The Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 progressed through a third reading in the Australian parliament on 8 December 2020 and its passage is now before the Senate. One parliamentary sitting day remains this year. The rushed or limited consultations, the limited coverage of the Bill and the lack of funds in SMEs were […]
Corporate insolvency reforms 2020 – referred to a committee?
Report No 11 of 2020 of the Senate’s selection of bills committee of 3 December 2020 has considered the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 “but was unable to reach agreement”. Appendix 2 to the report then gives “statement of reasons for referral”. Appendix 2 says: “Proposal to refer a bill to a committee […]
Australian insolvency practitioner disciplinary decisions – short but to what point?
This report of two insolvency practitioner disciplinary decisions in Australia will be brief because the decisions, or their publicly released versions, comprise 12 words each. Two named liquidators were referred to disciplinary committees. The law in Australia requires such referrals to be publicly disclosed, and they were, but no more, on the ASIC website. The […]
Bankruptcy seems to be the hardest word
The government has not said anything about insolvency law reform for financially struggling individual small business operators among its claimed “the most significant reforms to Australia’s insolvency framework in 30 years”: as to which, see Do the Australian small to medium business insolvency reforms add up? A difficulty may be that the government would have […]
SME insolvency – an alternative approach
Small business enterprises (SME) in Australia are conducted through the full range of legal entities available – sole traders, partners, corporate trusts, companies, associations and cooperatives. Their insolvency does not discriminate and comes down not so much to the structure as to the quality and conduct of the business itself. But according to their legal […]
Australia’s small business restructuring practitioners
Australia is proposing a sub-group of liquidator accountants to assist in administering its new corporate SME insolvency laws, set to commence on 1 January 2021, said by the government to be “the most significant reforms to Australia’s (corporate) insolvency framework in 30 years …”. The government’s stated aim is to diversify the insolvency industry and […]
Whistleblowing – panel debate – Bret Walker SC, Kate McClymont, and more – 19 November
The Australian Academy of Law is hosting a free on-line seminar on whistleblowing on Thursday evening 19 November 2020 from 5pm, chaired by Justice Julie Ward, Chief Judge in Equity, Supreme Court of NSW. This will be a panel debate comprising Bret Walker SC Kate McClymont Professor AJ Brown and Emeritus Professor John McMillan. Details […]
Insolvency Law Bulletin – Janus-faced SME reforms; new easy ways to avoid preferences; and how to recover gifts of money, maybe
An article in the forthcoming Insolvency Law Bulletin describes the proposed corporate SME insolvency reforms as Janus-faced,[1] the title referring to a claim that the content of the draft Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 does not appear to match the government’s rhetoric in support of it; (odd?). That has become more apparent when […]
Data Availability and Transparency Bill and Australia’s SME insolvency reforms
Following on some decades of government inattention to the collection of adequate statistical data in insolvency, but with law reforms proceeding regardless, the Australian government is now conducting a major project aiming to provide access to a wide range of government data for research purposes. One aim of the work is said to be to […]
Where’s personal insolvency nowadays? Australian parliamentary confusion
This rather painful transcript of Senate estimates hearing on 27 October 2020 illustrates many things but in particular how small business insolvency law reform is unco-ordinated. It reinforces my earlier comments that proposed reforms for the insolvency of small business under the draft Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 are too narrow, only or […]
Singapore’s new small business restructuring and liquidation regime – a “move away from earlier efforts to ‘hold the line'”
The Singapore parliament passed the Insolvency, Restructuring and Dissolution (Amendment) Bill 2020 on 3 November 2020. It will amend the Insolvency, Restructuring and Dissolution Act 2018 to introduce simplified debt compromise and winding up measures to deal with the impact of the COVID-19 crisis, and to broaden the range of practitioners authorised to implement those […]
Dear Parliamentary Counsel
The Commonwealth Integrity Commission Bill 2020 is important in many respects and some would see the following aspect of it as not. But I’ll press on anyway. Under s 220(2) of the Bill, the Governor-General must terminate the appointment of a commissioner (a CIC office holder) if he or she “(i) becomes bankrupt; or (ii) […]
Do the Australian small to medium business insolvency reforms add up?
The numbers upon which the government is relying for the proposed SME reforms[1] don’t seem to add up. Apart from the fact that the reforms ignore around 60% of small business, less than 20% of the remainder might benefit from the process. This is apparent from many available resources including a 2019 report of the […]
Is Australia’s insolvency safe harbour protection working – who knows?
The 2 year review of Australia’s safe harbour protection for directors, due from the government over a year ago, never took place. Q: The Treasurer is presently breaking the law in relation to the obligations in the Corporations Act? … A: That’s probably not how I’d express it. On 26 October 2020 the Economics Legislation […]
Australia’s insolvency law reforms – useful information from government officers
On 26 October 2020 the Economics Legislation Committee inquired of various Treasury officers about personal and corporate insolvency law reform, in particular about the proposed corporate SME related insolvency reforms. Statistics were offered on the day which don’t seem to relate to other information available, perhaps because the figures were only those of ASIC; but […]
Caution against “reasoning backwards” in assessing the validity of liquidators’ litigation
A judge has cautioned against “reasoning backwards” to assume that insolvency practitioners’ failed or injudicious legal proceedings either should not reasonably have been commenced or continued, noting that the conduct of litigation often involves difficult strategic decisions, the outcomes of which are notoriously difficult to predict. ASIC’s claim that the liquidator had breached his duties […]
SME insolvency reforms – a one year bankruptcy and more
The Australian government’s 2015 proposal to reduce the 3 year period for the imposition of the restrictions of bankruptcy to 1 year remains on foot; and there is no indication that any period of restriction will be imposed in the parallel corporate failure situation on a director of a liquidated company. As to a one […]
ATO’s right to garnishee – a “privileged position … likely to result in failed corporate rescue attempts”?
A recent article Getting the priorities right: ATO garnishee notices in times of corporate distress by Sylvia Villios and David Brown[1] has highlighted what is said to be the unsatisfactory priority that the ATO retains in insolvency through its continued use of garnishee notices,[2] which the authors claim gives the ATO a “privileged position” and […]
Spent convictions of insolvency practitioners
According to a report from Stuff in New Zealand, a long-established liquidator has been denied permission to continue to practise based upon his convictions for fraud offences over 25 years ago. Australia’s law of spent convictions might not allow that. Mr Damien Grant is reported to have been denied permission to continue to practise because […]
Transparency in the selection process of liquidators and trustees
The Insolvency Law Reform Act 2016 introduced some, let’s say, novel provisions in relation to the registration and discipline of Australian insolvency practitioners which I have explained elsewhere. The law strikes some balance between privacy of the individual practitioner and public disclosure of the selection or discipline processes. In light of the government’s proposed SME […]