On 12 May 2021, The Rating (Coronavirus) and Director Disqualification (Dissolved Companies) Bill was introduced to Parliament.

The Bill passed through the Commons stages unaltered and recently passed the Committee stage at the House of Lords on 10 November 2021. The Report stage will be taking place on 1 December 2021.

Purpose of the Bill

Victoria's Court of Appeal has reaffirmed the risk that a disclaimer of property may be set aside where the liquidators are indemnified, and the need for liquidators to be mindful where the company holds contaminated property.

Throughout the pandemic we have seen a succession of temporary practice directions, enabling practitioners to deal with the swearing of notices of intention (NOI) and notices of appointment (NOA) of administrators remotely, as well as answering a question which the judiciary had grappled with several times – when does a notice of intention or notice of appointment come into effect if filed outside of court hours?

Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now?

It is important for a receiver or voluntary administrator to ensure that a proper sales process is undertaken relevant to the circumstances as there is no "one-size-fits-all" approach.

The abolition of the "peak indebtedness" rule will complicate liquidators' tasks, not least its adverse effect on pursuing preferences where it's unclear what forms the single transaction.

Our research shows rescue financing in Australia has been deployed as one element of a broader restructuring strategy, most commonly by an existing stakeholder, rather than as a profitable activity in itself.

As participants in the Australian debt restructuring market continue to innovate we expect to see an increase in these control transactions, testing further again the Australian statutory regimes.

The Virgin sale shows the flexibility of Australia's restructuring regime and sets a significant judicial precedent for future control transactions.

Virgin Airlines restructured through voluntary administration

On 20 April 2020, Virgin Australia and a number of its subsidiaries were placed into voluntary administration owing $7 billion of debt to around 12,000 creditors with partners at Deloitte Australia being appointed as joint and several voluntary administrators of Virgin. Clayton Utz was appointed to act for the Administrators.

Overseas developments might have inspired mooted changes to create a debtor in possession model in Australia.

2021 began with a sense of optimism, but COVID-19 is continuing to wreak havoc on the Australian economy. The Commonwealth Bank of Australia is forecasting a 0.7% decline GDP in the September quarter and a likely rise in unemployment in July. New South Wales in particular, is expected to be hit very hard.