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 […]
“Record penalties” imposed … against insolvent companies
While much is made of the “record penalties of $438m” penalties imposed on the Phoenix Institute and related companies for egregious conduct in relation to the sale of training programs – see Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) (No 3) [2023] FCA 859 […]
ASIC beleaguered – updated
Updated 29 July 2023. Given the number of current and on-going inquiries into ASIC, it is as if the regulator were a wild renegade, calling for constant review and attack. One might have some sympathy for ASIC’s position. To keep track of these inquiries, this is a list of the current or on-going reviews of […]
Liquidator remuneration is “a perfect example of the many competing interests that arise in a liquidation” …
and is “indicative of broader systemic factors within the insolvency system itself …”. The recent PJC Report on corporate insolvency recommended that [13] the proposed comprehensive review of insolvency law consider the remuneration of insolvency practitioners, describing remuneration as “a perfect example of the many competing interests that arise in a liquidation.”[1] The review should […]
What does our insolvency system produce? [re-issued July 2023]
31 March 2022 Many of us who call for a major review of our insolvency laws must know that the data on the performance of those laws is quite limited, certainly in the area of the majority of insolvencies, the small to medium enterprises (SMEs). The government won’t act. Why would not the industry itself […]
Looking more at deregistered companies
“Enforcement agencies have long been aware of the role that the abandonment [deregistration] of companies plays in illegal phoenix activity. In 1995 the Australian Securities Commission (ASIC’s predecessor) estimated that 92 per cent of phoenix companies at the time were being deregistered under the ASC’s s 574 program (the predecessor to s 601AB of the […]
Thoughts on the PJC’s Corporate Insolvency Report
The Parliamentary Joint Committee on Corporations and Financial Services (‘PJC’) handed down its Report into Corporate Insolvency in Australia on 12 July. The Report contains 28 recommendations spread over 14 chapters and runs to over 350 pages. The PJC inquiry has been very thorough, with 78 written submissions (including a submission by ourselves), 5 days […]
Offence reporting by insolvency practitioners
What is said to be the limited response by ASIC to corporate misconduct reports by liquidators is the subject of some on-going attention. Recommendation 19 of the July 2023 PJC Report on corporate insolvency was that any comprehensive review of insolvency law should consider whether the current statutory reporting obligations for insolvency practitioners are best […]
