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.

1. Background and Overview

As described in our Client Alert "The new German business stabilization and restructuring regime ("German Scheme")" dated 12 October 2020, the German Federal Ministry of Justice and Consumer Protection had presented a draft bill (the "Original Bill") to introduce a new business stabilization and restructuring framework - the new "German Scheme" - into German law.

1. Background: Temporary Modification of the German Insolvency Regime to avoid COVID-19-related Insolvencies in Germany expires on 30 September 2020

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.