Background of the Act

Pandemic related restrictions on winding up companies come to an end.

In brief

The courts were busy in the second half of 2021 with developments in the space where insolvency law and environmental law overlap.

In Victoria, the Court of Appeal has affirmed the potential for a liquidator to be personally liable, and for there to be a prospective ground to block the disclaimer of contaminated land, where the liquidator has the benefit of a third-party indemnity for environmental exposures.¹

In brief

Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.

Key takeaways

As part of the overall scaling down of the COVID-19 support provided to UK businesses, the UK government has announced changes to the regime for winding-up petitions, with effect from 1 October – withdrawing, at least in part, some of the protections currently afforded to businesses.

Current position

In brief

With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID-19 pandemic were:

In brief

In brief

Creditors commonly find that their applications to wind up a company are suddenly deferred at the last minute by the appointment of a voluntary administrator.  Now, in the early days of the small business restructuring (Part 5.3B) process, the courts are already grappling with those circumstances in the context of that new regime. At the time of writing1, only four restructuring appointments under Part 5.3B have been notified to ASIC. Two of them have been the subject of court proceedings.

The resulting decisions reveal: