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.
On Saturday (28 March 2020) the UK Government announced certain changes to insolvency laws in response to COVID-19, intended to help companies and directors.
There are two aspects to the changes:
Retrospective suspension or relaxation of wrongful trading
New restructuring procedure and new temporary moratorium
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.
The Supreme Court has held that, where a company had been the victim of wrong-doing by its directors, the directors’ wrong-doing could not be attributed to the company to prevent it (or its liquidators) from bringing claims against the directors.
Following last weeks’ report from the Banking Standards Commission in which three former senior executives of HBOS were heavily criticised thoughts have turned to whether or not there is enough evidence for the executives to have disqualification proceedings brought against them. The report named the three executives responsible, and said that the bank, having run up £47bn losses in bad loans, would have gone bust even if the 2008 financial crisis had not happened.
How can a director be disqualified?