Does insolvent trading work? The UK may not think so.
In the context of the review of the safe harbour provisions in Australia, there have been recent articles on insolvent trading – s 588G – itself, from which liability directors may try to seek refuge in their s 588GA safe harbour. Trying to recover money from the directors personally, instead of from the remaining assets […]
A deferred tax debt can remain due and payable
If a company owing a debt enters into an agreed payment arrangement with the creditor, that can serve to defer that debt as being ‘due and payable’ for the purposes of determining the company’s insolvency – that is, whether the company can pay all its debts as when they become due and payable.[1] It depends […]
Don’t be too harsh on non-compliant directors of failed companies?
The laws regulating the conduct of directors of companies in liquidation and laws regulating persons who go bankrupt exist in two different universes, consistent with the relative influence of the stakeholders behind each. Past reform ideas to lessen time and expense in liquidations, and address phoenix activity, were rejected by directors as being ‘unjustifiably harsh’. […]
Million pound fines for breach of insolvency standards
The million pound fining of an insolvency firm and its administrators by the English accounting body ICAEW illustrates the differences between the UK’s insolvency co-regulatory regime, and a similar scheme soon to be adopted in New Zealand, and that of direct regulation in Australia. Comet The fine was issued by consent in relation to the […]
A pointless distinction in corporate insolvency
In the 19th century, where much corporate insolvency law thinking still remains, a distinction was made between court ordered liquidations on the one hand, and creditors’ voluntary liquidations (CVLs), both solvent and insolvent, on the other. An accident of insolvency history, as an early edition of Ford says, though perpetuated for over 100 years. The […]
Review of Australia’s insolvency safe harbour – s 588GA
Australia’s ‘safe harbour’ regime under s 588GA is due for review, since September 2019, as to whether it offers the right balance between creditor compensation and director discretion. Should the review first revisit whether the insolvent trading section – 588G – should be repealed or changed? The focus of the review is to be on […]
Dangers in liquidators running a ‘skinny case’
” … it might not be seen to be unreasonable [for insolvency practitioners] to avoid expending funds producing affidavits in relation to issues which might ultimately be agreed upon”. But .. All litigants and their lawyers have obligations to pursue matters economically, or, in the Federal Court, according to the ‘overarching purpose of the civil […]
All over a rooster
A bankrupt who claimed that noise attributed to her unauthorised rooster was in fact made by her peacock, which was disturbed by someone pulling feathers from a kookaburra, has been declared a vexatious litigant by the Federal Court. In earlier proceedings, a NSW court had verified the identity of a rooster on her property as […]
Special administration of an Aboriginal Corporation – Urapuntja Health
A major Aboriginal corporation in Australia’s Norther Territory – the Urapuntja Health Service Aboriginal Corporation – has been placed under the control of “special administrators” by the Registrar of Indigenous Corporations.[1] This followed serious upheavals in the local communities and physical and other risks to staff of the Service, and the potential disruption of essential […]
ARITA’s response to the Ombudsman’s small business insolvency inquiry
ARITA has offered a 60-page submission to the Ombudsman’s inquiry, which, given the quality of the inquiry, may be rather excessive but is nevertheless useful. It may also be seen as surprising, given ARITA’s criticism of the Ombudsman’s inquiry, which, as ARITA has explained, was announced only 2 months after ARITA had written to all […]