UK insolvency practitioners to come under direct government regulation
At the same time that the chair of the Australian PJC inquiry into corporate insolvency, Senator Deborah O’Neill, said that self- or co-regulation of insolvency practitioners (IPs) is one way of reducing the extent of government regulation,[1] the UK has decided to do away with its co-regulatory approach in favour of direct government regulation of […]
Gender, and diversity, in insolvency practice, continued
The July 2023 PJC report into corporate insolvency[1] makes recommendations on the “problem” of the limited female representation among liquidators, around 10%, noting that “there are clearly broader cultural or systemic factors at play [which] must be reflected on and addressed”. One broader recommendation, not necessarily focused on gender, is to reduce the 4,000 hours […]
UK’s review of its 2020 insolvency law reforms, with Australia compared
The quality of a recent UK review of its 2020 insolvency law reforms is compared with the approach taken in Australia. In my comment of June 2020 on what was to become the Corporate Governance and Insolvency Act (CIGA) in the UK, I explained its proposed introduction of a moratorium on creditor claims, a prohibition […]
Cancellation of a liquidator’s registration
While England is still deciding whether to change its system of insolvency practitioner regulation from one of co-regulation by professional bodies to one of direct government regulation, as in Australia, an example of the latter is a recent decision of a statutory disciplinary committee cancelling the registration of a liquidator. The defaults, though serious, were […]
Increase in Australian insolvency numbers
Personal insolvency numbers show a continued increase in numbers but still well below past figures; on the other hand, corporate insolvencies are just approaching pre-COVID-19 levels. Compulsory (court-appointed) bankruptcies and liquidations remain low. The construction industry is prominent in both personal and corporate insolvency numbers. The latest personal insolvency statistics for May 2023[1] show a […]
Should the firms of insolvency practitioners be regulated, along with the practitioner?
While Australia is currently focusing on the standards of conduct of accounting firms, and their partners – see Ethics and Professional Accountability: Structural Challenges in the Audit, Assurance and Consultancy Industry – Parliament of Australia (aph.gov.au) – it is pertinent to note that England is looking at extending the regulation of insolvency practitioners (IPs) to […]
Personal insolvency statistics – March quarter increase; April monthly decrease
There is good and bad news in the latest personal insolvency statistics from AFSA. March quarter increase The full March 2023 quarter numbers show an unfortunate increase of 12.6% over the same quarter in 2022 with a total of 2,494 new insolvencies recorded – and a 7.5% increase compared to the December quarter 2022. Quarterly […]
The respective complexities of corporate and personal insolvency
A question on notice of 1 March 2023 was asked by the chair of the Parliamentary Joint Committee on Corporate Insolvency in relation to what was referred to as an “implied difference” between personal and corporate insolvency – that there is a lot more money in corporate insolvency and that it is the more complex […]
Anti-money laundering laws to be improved, including registers of beneficial owners
The 2023 budget has allocated funds for action on Anti‐Money Laundering and Counter‐Terrorism Financing (AML) laws, including a beneficial ownership register to “record who ultimately owns, controls, and receives benefits from a company or legal vehicle operating in Australia”. There is some unfortunate background to this. The 2022 Bill As I reported earlier, the Anti-Money […]
World Bank’s B-Ready Report on country business systems, including on the efficiency of corporate insolvency systems
This explains the World Bank’s new Business Ready initiative, which will report on the business systems of up to 180 country economies including their insolvency systems. Some limitations on the methodology used by the World Bank are raised here. The World Bank Group has begun work to issue its new Business Ready (B-READY) report, which […]
Insolvency practitioner independence – how commercial is the fair-minded observer?
A pending WA appeal decision may address the issue of the extent to which commercial considerations surrounding the appointment of insolvency practitioners can be relevant in assessing their independence. A feature of the law concerning the independence of insolvency practitioners – IPs – is that it must be assessed in the context of the commercial […]
Personal insolvency statistics – March 2023 – beginnings of an increase?
The latest personal insolvency statistics released by AFSA for March 2023 show an increase in number over February but still well below past figures. New personal insolvency numbers increase in March 2023 | Australian Financial Security Authority (afsa.gov.au) During March 2023, there were 921 new personal insolvencies – rising from 796 in February – but […]
Insolvency law reform in Australia – three underlying concerns
With over 70 submissions from a wide variety of stakeholders and numerous answers to questions on notice, the parliamentary joint committee[1] inquiry into corporate insolvency has generated a high level of thought leadership and ongoing debate. We are ourselves pleased to see that a number of issues we have been raising have for the first […]
Personal insolvency numbers – an increase or a decrease?
While AFSA reports that personal insolvencies increased in number in February 2023, to 796, from 772 in January, this was hardly significant – in fact, more a decrease – given the usual low numbers over the December-January period. Monthly personal insolvency statistics | Australian Financial Security Authority (afsa.gov.au) In context, there were 1,614 personal insolvencies […]
Now we have three Part 5.3B restructuring practitioners
One more person has been appointed as a restructuring practitioner to conduct administrations under Part 5.3B of the Corporations Act bringing the total to three since this law first commenced in January 2021. See One small business restructuring practitioner – Murrays Legal Mr Ben Sewell is a Sydney lawyer and accountant whose practice focuses on […]
ASIC’s insolvency law enforcement role
The Senate Economics References Committee is loading up submissions received on its reference into ASIC’s capacity and capability to “undertake proportionate investigation and enforcement action arising from reports of alleged misconduct…”. Australian Securities and Investments Commission investigation and enforcement – Parliament of Australia (aph.gov.au) The Committee reports that it has received many submissions “due to […]
Attorney-General’s Roundtable on Personal Insolvency
A summary of priority issues discussed at the Attorney-General’s personal insolvency law reform roundtable held on 2 March 2023 has been released by the Attorney-General’s Department: Ministerial Roundtable on Personal Insolvency: summary There were five rather particular issues discussed with a range of other issues following. All were useful through none went to the fundamentals […]
Liquidator discipline outcome – reasons unknown
A discipline committee has cancelled the registration of a liquidator but declined to publish its reasons for doing so. ASIC has advised by media release the cancellation of the registration of a liquidator, Cameron Lindsay Duncan, following a decision of a disciplinary committee on 28 February 2023. 23-065MR Liquidator disciplinary committee cancels registration of Cameron […]
Bankrupt succeeds in gaining access to trustees’ notice to produce
A bankrupt has successfully obtained a copy of a s 77A notice to produce served by his trustees on the police which resulted in 600,000 documents being produced. The bankrupt’s request was made under s 70-56 to Schedule 2 to the Bankruptcy Act, which relevantly allows the bankrupt to request information etc. from trustee. The […]
Breach of an undertaking not to enter insolvency, an undertaking that was “not worth the paper it was written on”
In a penalty judgment against GetSwift, Justice Michael Lee had some comment to make about GetSwift’s entry into voluntary liquidation in 2022 despite undertakings earlier given to the Court in 2020 that it would not do so: Australian Securities and Investments Commission v GetSwift Limited (Penalty Hearing) [2023] FCA 100 (16 February 2023) (austlii.edu.au). GetSwift […]
Peak indebtedness and preferences – an Australian authority now “offering a considered analysis of the rule”
The High Court of Australia has found that the peak indebtedness rule has no place in Australian law in the calculation of the amount claimable as a preference: Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 (8 February 2023) (austlii.edu.au) The New Zealand Court of Appeal said as much in its 2015 decision […]
Personal insolvency reform in Australia
The government is convening a “national roundtable with key stakeholders” on 2 March 2023 in relation to personal insolvency law under the Bankruptcy Act. This will occur in parallel with a Parliamentary Joint Committee inquiry into corporate insolvency, which has a further hearing the day before, on 1 March 2023. According to the Attorney-General, our […]
DOCAs – should ‘not much of a return to creditors but better than the liquidation alternative’ be enough?
Issued June 2021, re-issued January 2023 The WA Supreme Court has dismissed a challenge to deeds of company arrangement (DOCAs) that offered ‘not much of a return to creditors’ but ‘better than’ the liquidation alternative, an outcome in accord with the secondary objects of the voluntary administration regime under s 435A(b) of Part 5.3A of […]
How low can we go – funding the insolvencies of assetless estates
Obvious as it is to say, insolvency involves limited or no money, and how to fund its existence as a legal regime is an issue in many countries. An American academic has offered some ‘KISS’ thoughts based on a review of a number of countries. A comparative explanation of how Australia operates is given. […]
