The Australian government introduced two significant new insolvency solutions following the enactment of the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth), as part of the federal government’s JobMaker Plan in response to the COVID-19 pandemic. The second of these solutions is the Small Business Debt Restructure Process (SBDRP).

The benefits of entering a SBDRP include:

As stated in our previous article, a statutory demand must be addressed to the proper entity (including the correct ACN number) at the registered office address of the debtor company (which can be searched by an ASIC search of the debtor company) in order for it to be considered valid. This statutory demand can be left at or posted to the debtor company’s registered office address or delivered personally to a director of the debtor company who resides in Australia: see section 109X(1) of the Corporations Act 2001 (Cth) in this regard.

A members voluntary winding up (MVWU) is implemented in circumstances where the company’s members no longer wish to retain the company’s structure because its existence is no longer required or useful. It is only available if the company in question is solvent.

A MVWU is the only way to fully wind up the affairs of a solvent company. All outstanding creditors are paid in full, and any surplus assets are distributed to its members. A MVWU also ensures that the interests of the company’s members are protected while the company structure is dismantled.

The Honourable Justice Black of the NSW Supreme Court has ruled on an application pursuant to s90-15 of the Insolvency Practice Schedule (Corporations) involving the complex interplay between s556 and s561 of the Corporations Act 2001 (Cth) (Act).

If you are a creditor who is owed money by a company that has gone into voluntary administration, you will receive reports and notifications of meetings from the voluntary administrators.  Chamberlains can advise you on your rights and what to do in this situation.  In this case update, we look at one issue that may come up in such a scenario – when more time is needed before the second meeting.

In this week’s TGIF, we consider the Federal Court’s recent decision inFotios (Bankrupt) v Helios Corporation Pty Ltd (No 3) [2023] FCA 251, and earlier decisions in the same proceedings, clarifying the current Australian position as to priorities between creditors of successive trustees.

Key takeaways

High Court's Landmark Decisions Clarify the Position for Creditors and Liquidators in Insolvency Proceedings

Originally published in the March 2023 issue of the Australian Restructuring & Turnaround Association Journal (ARITA), this article explores the interaction of statutory set‑off and unfair preference claims through its legislative origins, historical application and consideration by the courts, before discussing the High Court’s recent judgment and concluding with key takeaways for insolve

Navigating cross-border bankruptcy: Gilbert + Tobin has assisted in the recognition of foreign bankruptcy proceedings in Australia, acting for the trustees in bankruptcy in a successful application to recognise Singaporean bankruptcy proceedings.

Background

On 28 September 2022, the Parliamentary Joint Committee on Corporate and Financial Services (“Committee”) began an inquiry into corporate insolvency in Australia, the first of its kind in over 30 years. The Committee invited submissions from interested persons and stakeholders to provide recommendations on how best to improve Australia’s corporate insolvency framework. Submissions have now closed, with contributions from over 50 industry bodies, government bodies and various representative bodies and groups.