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Summary Australian insolvency law, as it currently stands, incentivises the termination of businesses upon insolvency; An alternative model would incentivise the genuine ‘turnaround’ or transformation of a business so that it would continue as a going concern; Policymakers should consider whether Australia needs to adopt ‘debtor-in-possession’ mechanisms or, alternatively, make it easier to carry out […]

Summary Employees have priority over other unsecured creditors in the case of insolvency, though the exact priority depends on the employee entitlement in question; The Fair Entitlements Guarantee (FEG) Scheme is intended to be a scheme of last resort, however, it appears to be misused by some companies that are wound-up; Contractors are not employees […]

Summary Receivers are appointed to ensure payment of the debt of certain secured creditors; They are distinct from liquidators or voluntary administrators, though, as with those appointees, they can also be appointed in the case of insolvency; Unlike liquidators or voluntary administrators, receivers act only in the interests of certain secured creditors; The inefficiency that […]

Summary Prior to the passage of the 2016-2017 insolvency reforms, creditors had limited powers to review or question the activities or fees of liquidators One important insolvency reform has been the introduction of a new power for creditors, ASIC, or the Court, to appoint a Reviewing Liquidator. The Reviewing Liquidator has broad powers to look […]

It is common for creditors to think that liquidation is a useful mechanism for getting their due from a debtor company. The evidence does not support this After winding up, and the payment of liquidator remuneration and expenses, usually there are zero cents left for the remaining unsecured creditors If a liquidation has been pursued, […]

  ATO payment plan – summary An ATO payment plan is a tailored option for the repayment of an individual or business tax debt It allows the debtor to pay off their tax debt and interest in a time frame and with a regularity that suits their financial situation A payment plan is often appropriate […]