On the 2 August 2021 Treasury released a consultation paper titled ‘Helping Companies Restructure by Improving Schemes of Arrangement. The consultation is aimed at reforming Australia’s scheme of arrangement procedure.

Administration and deeds of company arrangement have continued to have significant influence on major restructurings in the Australian market. In larger restructurings, administrations represent significant transactions where capital is deployed strategically to acquire businesses at significant discounts. A sound understanding of the procedures is key to private equity players for many reasons. Portfolio companies can be exposed to administrations where suppliers, customers or competitors experience financial difficulties.

After a lengthy consultation period, the Pre-Action Protocol for Debt Claims (PAPDC) has now been finalised and will come into force on 1 October 2017. This protocol will apply to lenders who are seeking payment of a debt from an individual/ sole trader, as a debtor or guarantor. Now is the time to update your systems and procedures to accommodate the new protocol requirements.

What is required?

The Ministry of Justice is consulting on a revised draft Pre-action Protocol for Debt Claims (Debt Protocol) after an earlier version was lambasted by representatives of the credit industry as being totally disproportionate. The new version attempts to strike a more proportionate balance between the needs of creditors, debtors and debt advisors.