In March 2020 the Australian Government announced a series of amendments to the insolvency and bankruptcy laws as part of the wider economic response to the COVID-19 pandemic.

Those amendments were initially scheduled to end on 25 September 2020 and were then extended until 31 December 2020 to allow further breathing space for debtors.

On 1 January 2021 those amendments came to an end however most of these ameliorating changes have been kept, while some altered – possibly for the long term.

Corporate Debtors and Statutory Demands

Following the recently announced extension of the JobKeeper programme and the Federal Government’s Budget Update, we revisit the relief measures available to corporations experiencing financial distress during the COVID-19 pandemic, which are currently scheduled to end in September.

Temporary measures scheduled to end on 24 September 2020

Ahead of the October budget, the treasurer has announced proposals to overhaul insolvency laws in Australia, to introduce provisions to allow struggling businesses to continue trading whilst a restructuring plan is developed. The changes, which share similarities with US Chapter 11 bankruptcy provisions, are yet to be legislated, but are proposed to commence with transitional provisions from 1 January 2021.