Long-awaited law reform to bring Australia's insolvency regime into step with many of its trading counterparts is slated to be enacted in the second half of 2017. The text of the law is currently before parliament for debate. If passed, Australia will see:

In December 2016 we posted on the NSW Law Reform Commission’s recommendation to replace section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Six months later, we can now confirm that section 6 is (finally) dead and herald the new era of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (Act). The new Act is now live (from 1 June 2017) and is a welcome clarification of the confusion and ambiguity caused by section 6.

The Australian government has released draft legislation which proposes significant legislative change to insolvency laws in Australia. One of the changes proposed, is that directors will not be liable for insolvent trading in certain circumstances where the company is undertaking a restructure.

Under the proposed safe harbour reform, directors will not be liable for debts incurred whilst the company is insolvent if they can show that:

Japan

Report published on ensuring fair and timely disclosure of information to investors. The FSA announced that the Task Force on Fair Disclosure Rule of the Working Group on Financial Markets of the Financial System Council has published the “Report - Ensuring fair and timely disclosure of information to investors.” (3/3/2017)

Hong Kong

The increase in the availability of alternate capital in Australia over the past decade has provided a landscape for well-tested global restructuring techniques to be applied locally. This includes 'loan to own' strategies.

The use of pre-packs or pre-positioned asset sales in Australia has traditionally been limited. This is a result of impediments to such transactions under the Australian legislative insolvency regime.

The interplay of these impeding factors means that there are few true pre-pack transactions in Australia. However, significant reform to the Australian insolvency regime is expected to be implemented in 2017. We wrote about the main aspects of that reform in our last article, `Australian insolvency law reforms aim to increase business restructuring opportunities'

The Australian government is working to significantly reform Australia’s current insolvency laws by mid-2017.

The reforms are intended to achieve greater likelihood of business preservation by introducing the flexibility to achieve real turnaround of businesses in crisis.

The proposed changes include:

In Berryman v Zurich Australia Ltd [2016] WASC 196, the Supreme Court of Western Australia held a bankrupt, Berryman, was able to maintain legal action in his own name, claiming TPD insurance benefits from Zurich.

The Bankruptcy Act 1966 (Cth) relevantly provides:

In Austcorp Project Number 20 Pty Ltd v The Trust Co (PTAL) Limited, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (in liq) [2015] FCA 850, the Federal Court of Australia had to determine whether to dismiss the proceedings for failure to comply with previous orders for security for costs, or vary those orders for security. The basis upon which the Court made the orders for security in the first place is set out in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd [2014] FCA 1371, and was canvassed in an ear

SFC released consultation conclusions on supervisory assistance. The Hong Kong Securities and Futures Commission (SFC) released consultation conclusions on proposed amendments to the Securities and Futures Ordinance (SFO). The amendments would provide assistance to regulators outside of Hong Kong upon request by making inquiries and obtaining certain records and documents from licensed corporations or their related corporations. The proposed supervisory assistance will be subject to both existing and new legislative safeguards.