New Zealand’s COVID-19 laws on reckless trading and debt hibernation
The COVID-19 Response (Further Management Measures) Legislation Bill has been introduced into the New Zealand parliament is now before the Epidemic Response Committee. It is broadly equivalent to the Omnibus Act 2020 in Australia. RITANZ offers useful comments on the Bill. Safe harbour It provides a safe harbour for s 135 – reckless trading – […]
Further Covid-19 Restructuring Survey Results – Australia
In my post of 3 May 2020, I reported on various surveys both during the COVID-19 crisis, and before. One that was then pending was from KordaMentha Corporate and TMA which surveyed more than 300 corporate renewal professionals, lawyers and lenders. Their survey results are now out – View the results. – and some responses […]
Impact of the Jackson reforms on insolvency litigation in the UK
An April 2020 report in the UK by Professor Peter Walton on the impact of the ‘Jackson’ legal costs reforms on insolvency litigation reveals that the impact has not been as severe as anticipated, and that despite that market having been ‘turned upon its head’, other arrangements through funders are being devised. The costs of […]
Surveys of Australian insolvency and turnaround professionals
An early survey of insolvency professionals in Australia in relation to the impact of COVID-19 reveals an apparent contradiction, that insolvency firms, whose work depends on businesses struggling or failing, are themselves are being adversely impacted by the economic conditions. There are reported to be significant falls in insolvency work, insolvency firms registering for the […]
Are industry and professional bodies’ disciplinary records protected from court scrutiny?
A liquidator had been the subject of disciplinary proceedings by ARITA in 2018. In later unconnected court proceedings, as a joint liquidator of a company, a challenge was made to the denial of an insurance cover for the company. The insurer raised a number of issues about not only the company itself, but also the […]
Australia’s temporary personal debt protection
One of the ‘COVID-19’ bankruptcy reforms made in Australia on 25 March 2020 was to extend the period of a stay of creditor claims against a debtor from 21 days to six months, termed a temporary debt protection.[1] Importantly, a debtor commits an act of bankruptcy when they access this protection.[2] The fact of the […]
Insolvency practitioner independence – law and practice
One of Australia’s insolvency bodies, ARITA, has issued a reminder to its members about the need for liquidators to maintain their independence, saying that ‘it’s the law’ and that the recent COVID-19 reforms in Australia ‘do not impact the legal position’.[1] The law and practice don’t always coincide. +++ Australia has always taken a strict […]
Some thinking about insolvency pre-packs, panels and more
In a newspaper article of 20 April 2020* promoting a new ‘restructuring business’, some ‘new thinking’ is offered on changes needed to meet what is said to be an expected ‘insolvency deluge’. The thinking, in relation to pre-packaged insolvencies and an insolvency panel, is not new but it usefully adds to the list of reforms […]
UNCITRAL guidance on MSE insolvency – Insolvency Law Bulletin article
An article in the latest Insolvency Law Bulletin[1] reports on the progress of UNCITRAL Working Group V[2] in developing law reform guidance on the resolution of the insolvency of micro and small-sized enterprises (MSEs), an issue for Australia and comparable jurisdictions, now heightened as a priority in light of the impact of COVID-19. As the […]
A class action hearing ‘as inconvenient and tedious as this is going to be’ – COVID-19
Ford Motor Co has failed in having adjourned, for COVID-19 reasons, a class action hearing over its allegedly defective gear boxes. The hearing remains set down for a number of weeks starting in June; Ford had sought an adjournment to October 2020. The reasons of Justice Perram for maintaining the June hearing date canvass a […]
Cryptoassets, hot and cold wallets, and a liquidation
Was cryptocurrency ‘property’ of a company in liquidation, and was it held on trust for the accountholders? Cryptopia Ltd (in liq) originated as a ‘hobby’ which in 2014 was formed as a cryptocurrency trading exchange with ‘a short but tumultuous history’. It went into liquidation in May 2019 after suffering a serious hack and the […]
New Zealand insolvency practitioner regulation – possible delay
The new corporate insolvency practitioner licensing regime in New Zealand, due to start in July 2020, may be put off for one year. The Insolvency Practitioners Regulation Act 2019 and the Insolvency Practitioners Regulation (Amendments) Act 2019 are scheduled to come into force on 17 June 2020. However, the NZ government has said that while […]
Lost in my translation – correction to bankruptcy trustee remuneration statistics
AFSA has properly drawn to my attention that figures I have given about the remuneration of bankruptcy trustees have not been correct, or correctly explained from its figures. This seeks to redress and correct that. As AFSA explains, its Report, Registered trustee remuneration in the personal insolvency system, did not say, as I have recounted, […]
New Zealand’s COVID-19 insolvency measures – safe harbour; debt hibernation
The New Zealand Government has announced it will be introducing legislation to make changes to the Companies Act to help companies facing insolvency due to COVID-19 to remain viable and retain employment. In addition, the government is deferring commencement of NZ’s new insolvency practitioner licensing legislation, which was to commence in July 2020, for up […]
Latest corporate insolvency update in Australia
Apart from its interest to Australian liquidators and bankruptcy trustees, the latest Corporate Insolvency Update[1] of the corporate insolvency regulator, ASIC, will be of interest internationally given the common COVID-19 issues we are all facing. To initially explain the tone and content of ASIC’s bulletin, Australia has a bifurcated insolvency system,[2] with the Corporations Act […]
Case adjourned for COVID-19 health and property value concerns
A son’s claim under the ACT Family Provision Act 1969 sought a life interest in property of his deceased mother, which had been left to his sister, her daughter. He applied to adjourn the 30 March 2020 hearing for reasons to do with COVID-19. The background to the dispute is complicated and the subject of […]
Australia’s new fortnightly ‘COVID-19’ personal insolvency statistics
The Australian bankruptcy trustee and regulator AFSA has started to release fortnightly statistics on personal insolvencies in Australia[1] to assist in monitoring the economic and social impact of COVID-19, and the recent bankruptcy law changes made in response to the crisis. This is a commendable and prompt contribution which will inform any needed law and […]
‘Unhappy’ delay in an insolvent winding up
A NSW Judge was ‘unhappy’ about delay in a solvency report being prepared for the defendant, in response to what had become a creditor’s ‘aged’ winding up application based on the defendant’s non-compliance with a winding up demand. On an application for a further adjournment, to 15 June 2020, the Judge described the variable evidence […]
Reform of insolvency communications by email, and beyond
Corporate insolvency law in Australia concerning communications with creditors needs modernising, and well beyond what is available in 2020. When early cars, then termed locomotives, were first allowed on the road England’s ‘Red Flag Act’ of 1865 required a man with a red flag to walk ‘60 yards’ ahead to alert ‘the Riders and Drivers […]
ARITA’s ‘bushfire and COVID-19’ request to government for funding
ARITA – the main Australian industry body representing insolvency practitioners and lawyers – has asked the government[1] for funding to enable it to address various issues in corporate insolvency highlighted by the current crisis. ARITA raises aspects of long held concerns[2] of myself and Professor Jason Harris which we raised again this week, our views […]
Managing the insolvency curve – a new government role is needed?
There is expected to be a wave of businesses and individuals going into liquidation or bankruptcy despite the huge financial measures being taken by the government. These insolvencies will occur despite the recent measures limiting the rights of creditors to bring insolvency proceedings, and despite the additional safe harbour protection from insolvent trading for company […]
Just when we have some creditor activism in insolvencies …
Will the current extreme crisis we confront finally stir insolvency creditor activism, but in the wrong way? or further dampen it? Just as the drum continued to be beaten on the problem of creditor disengagement in insolvencies and an article appears offering glimmers of creditor activism arising, the government has responded to the extreme economic […]
Changes to Australia’s insolvency laws – some different perspectives
The recent changes to Australia’s insolvency laws are being well explained by the experts. These are some comments from me both on the changes and on some gaps. The changes to Australia’s insolvency laws are well explained elsewhere – the extended declarations of intention; the new $20,000 threshold for bankruptcy petitions; and $20,000 thresholds for […]
How to best handle a major airline collapse
When a government sets up an inquiry into how to deal with the insolvency of a certain industry, the industry and those involved in it might become a little nervous. Airline Insolvency Review, March 2019 A Review Report commissioned by the UK government into the processes available to deal with the insolvency of airlines was […]