Cash flow and current and future liquidity are now real concerns for many businesses during this COVID-19 pandemic. Increasingly, the attention of directors and the wider economic ecosystem is turning to consider the issues of approaching insolvency and the duties of directors.

In line with the current approach of the UK Government to support businesses, on Saturday, 28 March, the Business Secretary, Alok Sharma, announced that UK wrongful trading insolvency laws are to temporarily change to help give businesses and directors some "breathing space".

In a comprehensive report issued last week, the American Bankruptcy Institute Commission on Consumer Bankruptcy proposed recommendations that would allow student loans to be easier to discharge in bankruptcy, citing the staggering $1.5 trillion in student loan debt held in the United States and the current difficulties with discharging this type of debt in bankruptcy.

The High Court today granted special leave to the Commissioner of Taxation (Commissioner) to appeal against the decision of the Full Court of the Federal Court in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2014] FCAFC 133. The appeal is likely to be heard later this year.

Significance

The decision of the Full Court of the Federal Court handed down this week in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2014] FCAFC 133 offers welcome certainty to administrators, receivers and liquidators in relation to their obligations with respect to post-appointment tax liabilities.

Significance