On 23 March 2020, the Australian Parliament passed the Coronavirus Economic Response Package Omnibus Act No. 22 of 2020 (the Act), which is designed to provide an economic response to the effect, on Australia, of the coronavirus pandemic sweeping the world by stimulating and supporting economic activity.

In relation to the Australian insolvency regime the Act made some significant changes to the relevant laws as follows.

Temporary relief for financially distressed individuals and businesses

The Australian Financial Review recently published an article regarding requests to the Australian Government to impose a moratorium on the insolvent trading laws to "help businesses during the economic downturn".

The U.S. Court of Appeals for the Second Circuit recently held in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 2013 BL 341634 (2d Cir. Dec. 11, 2013), that section 109(a) of the Bankruptcy Code, which requires a debtor "under this title" to have a domicile, a place of business, or property in the U.S., applies in cases under chapter 15 of the Bankruptcy Code.

Section 502(b)(6) of the Bankruptcy Code caps the amount of a lessor’s claim against a debtor-lessee for damages arising from the termination of a real property lease. The statutory cap is calculated according to a formula that considers, among other things, the date on which the lessor “repossessed” or the debtor-lessee “surrendered” the leased property. Because those terms are not defined in the Bankruptcy Code, however, courts disagree as to whether state or federal law should determine their meanings for the purpose of calculating the allowed amount of the lessor’s claims.