Corporate insolvency reforms to come under review
Parliament’s Joint Committee on Corporations and Financial Services announced on 28 September 2022 it would review Australia’s Corporate Insolvency laws as the end of pandemic-era support prompts the collapse of financially stretched businesses, most notably in the construction industry.
The terms of reference for the inquiry include current industry trends, operation of existing legislation such as unlawful phoenixing reforms, the operation of the PPSR and the simplified liquidation reforms. The inquiry will look at other areas of reform, such as unfair preference claims and insolvent trading safe harbours.
Other potential areas for reform include small business restructuring laws, which allow firms with up to $1 million in liabilities to seek advice from an insolvency practitioner on developing a restructuring plan, will also be reviewed, as will new laws penalising directors who avoid paying workers’ entitlements during insolvency.
The full details can be found here.
