ASIC’s report on small business corporate restructurings under Part 5.3B
I am dubious about many of the outcomes touted for insolvency “restructurings”, or at least without the negative outcomes reported as well, to put the business restructuring in full perspective. Court decisions on challenges to deeds of company arrangement are useful for the detail, whatever the legal result. Numbers of small business corporate restructurings under […]
Bankruptcy data 2021-2022 – rates of return, fees etc
At the end of 2022, AFSA quietly released detailed data on the operation of the personal insolvency system in 2021-2022. Some extracted figures and comments are here. One initial explanatory comment is that the Official Trustee (OT) generally takes the assetless bankruptcies – about 80-85% of the total – and has a commission-based charging system; […]
Business bankruptcies – 6,000 to 9,000 each year
Given that ‘small business’ itself is defined in various ways, none of which is based on the legal structure of the business, it may not be surprising that small business bankruptcies are hard to pin down, definitionally, and in number. As a rough guide, sole trader/partnerships comprise about half of small business in Australia, the […]
Failing fast … five hundred and something days to wrap up a business?
At the PJC inquiry into corporate insolvency, in the context of the 2015 Productivity Commission (PC) Report on Business Entries and Exits, the point was made that going through a corporate insolvency was a “very long and complex process” with completion of a liquidation taking on average over 500 days. “That was the median, and […]
Parliamentary insolvency inquiry – the business model of insolvency firms
Some fundamental issues about the operation of insolvency law and practice are being raised in the joint parliamentary committee inquiry into corporate insolvency,[1] more so than in any other insolvency inquiry in recent times. This is despite the fairly orthodox list of legal issues in the terms of reference. A particular issue in focus is […]
Relationships of a liquidator and conflicts of interest
A general purpose liquidator has been found to have had a conflict of interest because a former legal adviser to several of the companies in liquidation – offering “funeral products” – was both the spouse of a partner in the liquidator’s firm and a shareholder in a company associated with the liquidator’s practice. This information […]
Repair and maintenance
The operating system of Murrays Legal is undergoing repair and maintenance, to address a slow-down in its usual thoughtful articles appearing in recent times. Readers have noticed but they should also notice once the repairs are completed. Thank you Murrays Leg
Penalties imposed on debt agreement administrator for false and misleading, threatening and coercive conduct against debtors
ASIC has succeeded in obtaining penalties against A & M group for false and misleading threatening and coercive conduct against debtors who had missed payments under their debt agreements. Australian Securities and Investments Commission v A&M Group Pty Ltd trading as Debt Negotiators [2022] FCA 1534 (fedcourt.gov.au) A&M Group, which trades as Debt Negotiators, acts […]
Abolition of the AAT, and its insolvency law matters
The Administrative Appeals Tribunal is to be abolished we are told and replaced by a new administrative law review body in 2023: see Government to abolish Administrative Appeals Tribunal – Mark Dreyfus KC MP. The AAT has contributed much in its areas of relevance in bankruptcy and corporate insolvency. It serves the purpose of providing […]
The gender gap in insolvency
An article in the latest Insolvency Law Bulletin – The gender gap among Australian liquidators,[1] by Paulina Fishman – comments on the fact that only 9% of liquidators are women. That gap is apparent from repeated surveys in an industry where diversity of gender is seen as a necessary feature in the range of circumstances […]
Insolvent assetless MSMEs – all but forgotten?
My commentary of October 2020 is re-issued, for readers’ interest. Does it matter that a company is insolvent such that something should be done by way of putting it into a formal insolvency arrangement under the Corporations Act? It seems not, according to the insolvency reforms announced by the Australian government, and according to insolvency […]
Rethinking Insolvency Practitioner Remuneration – Insolvency Law Bulletin
Had the decision in Re HRL Limited (in liq) [2022] VSC 693, allowing a “success fee” on insolvency practitioner (IP) remuneration, been handed down in time, it would have rated a mention in my article Rethinking Insolvency Practitioner Remuneration, in the latest Insolvency Law Bulletin. The article however tends to focus on the smaller end […]
The latest Insolvency Law Bulletin – remuneration, trading trusts, financial product collapses, gender, and more
In the latest issue of the Insolvency Law Bulletin, we have an article on a simpler solution to insolvent trading trusts, by Olivia Newman, of Norton Rose Fulbright, to limit ipso facto clauses terminating an insolvent trustee. This would be in the interests of the appointed liquidator retaining the right of sale and thereby avoiding […]
What is it about bankruptcy?
It was November 2015 that the then government announced a proposed reduction in the period of restrictions of bankruptcy to one year. No change was made. Since then, we have had COVID-19 and in the space of a week, in October 2020, the government announced and sought views on new laws for small business (corporate […]
Receiver’s demand for documents made on a bankrupt director
The New Zealand Court of Appeal has found that a director, despite being bankrupt, must hand over documents of the company of which he was a director on a demand made by a receiver. The term “director” includes former directors. This interpretation prevents a director simply resigning on the appointment of a receiver and thereby […]
PJC insolvency inquiry – deregistered companies submission
An early submission to the Parliamentary Joint Committee inquiry into corporate insolvency from Mr Russell Morgan, liquidator, of 15 November 2022, has raised issues likewise being raised by myself and Professor Jason Harris, as to the numbers of companies deregistered by default by ASIC with no oversight as to their trading history and financial position. […]
A productive insolvency regime – who knows?
In the various calls for a holistic review of Australian insolvency law, there is little explanation of what exactly needs law reform attention – processes leading up to insolvency, investigations and examinations, antecedent transactions, discharge, rehabilitation? Issues that have been raised lack adequate evidence to substantiate where the law is not working. This is odd […]
The Parliamentary Joint Committee and “small business insolvency”
The terms of reference of the current PJC inquiry into corporate insolvency refer at times to small business but given that small businesses comprise over 95% of all businesses in Australia, they are central to nearly all the various questions raised in the terms of reference. Terms of Reference – Parliament of Australia (aph.gov.au) Small business […]
NSW clubs and their insolvency appointments
The NSW Registered Clubs Act 1976 has a quaint provision – s 41 – providing that an insolvency appointee such as a liquidator or administrator must be someone either appointed by NSW’s own Supreme Court or first approved by the Authority. This refers to the Independent Liquor and Gaming Authority set up under the Gaming and Liquor […]
Anti-money laundering laws – where are we at?
All bills before parliament before the 2022 election have lapsed. Hence, a pre-April 2022 Bill in response to a 2016 recommendation to introduce law to counter money laundering and terrorist financing – by way of a Bill introduced into parliament in February 2022 requiring the government to introduce a Bill into parliament by 30 September […]
The several inquiries into ASIC
There are now several government inquiries into ASIC, directly or indirectly, perhaps indicating either the breadth of ASIC’s remit, or some concern about its work, or “other”. PJC corporate insolvency inquiry The current PJC corporate insolvency inquiry gives some general focus to ASIC in the terms of reference as to the operation of the existing […]
Australia’s review of its corporate insolvency laws – updated
The hearing in relation to the law of set-off and insolvency in Metal Manufacturers Pty Limited Gavin Morton as liquidator of MJ Woodman Electrical Contractors Pty Ltd (in liq) & Anor (B19/2022) [see footnote 5 below] was heard by the High Court on 12 October 2022. The transcript is here. A decision is reserved. The […]
Initial industry views on the parliamentary joint committee on corporate insolvency
While submissions to the parliamentary joint committee on corporate insolvency are not due until 30 November 2022, some indication of the views of those involved can be anticipated from their ongoing law reform commentary and some more recent views expressed in Insolvency News Online about what the inquiry should recommend.[1] One stakeholder focuses on […]
The annual reports of the insolvency regulators
Public sector annual reports nowadays are often more inward looking than in the past, agencies being required to report on a range of issues about their workload, staffing conditions and whether various KPIs have been met, which they invariably have. AFSA AFSA’s 2022 annual report of 157 pages is no exception. Some relevant information from […]
