Treasury has released draft regulations and a draft declaration for public consultation. The regulations and declaration support the stay on enforcement of ipso facto clauses against relevant entities. Ipso facto clauses allow parties to enforce a right, and terminate or amend a contract, when their contractual counterparties have entered into formal insolvency, regardless of the counterparties continued performance of their obligations under the contract.
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Bogra is a company that is active within the funeral industry. As a result of serious financial problems, an administrator (bewindvoerder) was appointed on 28 June 2017. On the same date Bogra was declared bankrupt (30 June 2017), the employment agreements of Bogra’s employees were terminated. Funico acquired (part of) Bogra’s assets on 18 July 2017 due to an asset transaction. Effective 19 July 2017, Bogra’s activities were continued by Bogra Uitvaartkisten.
The Government has released a consultation paper as part of their commitment to ongoing reform of Australia’s corporate insolvency regime. Phoenix activity refers to both legitimate business rescue activities and serial insolvency to avoid debts.
On 12 September 2017, the Hon Kelly O'Dwyer MP, Minister for Revenue and Financial Services, announced the Government's plans to crack down on illegal phoenixing activity (ie, the stripping and transferring of assets from one company to another to avoid paying liabilities) and ensure that those involved face tougher penalties.
The Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth), which introduces a safe harbour for directors of insolvent companies and a stay on the operation of ‘ipso facto’ clauses during and after certain formal insolvency processes, received Royal Assent on 18 September 2017.
Director safe harbour
Crusade against dormant companies: make sure you file your annual accounts on time!
Introduction
On 5 September 2017, the Dutch legislator published an amended bill on pre-insolvency proceedings in the Netherlands1 for consultation purposes.2 The Bill contains a proposal for an amendment to the Dutch Bankruptcy Act (Faillissementswet) which enables a company in financial difficulties to propose a composition outside insolvency proceedings to its creditors and shareholders, to restructure problematic debts.
The Senate Economics Legislation Committee has released a report (Report) regarding its inquiry into the provisions of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 (Bill) which amends:
The Treasury Laws Amendment (2017 Enterprise Incentives No 2) Bill 2017 was passed by the House of Representatives on 22 June 2017 and has had a second reading moved in the Senate.
The Bill: