This week's issue has a strong ESG focus. We cover the Senate Committee's report into the government's Bill to overhaul the existing 'safeguard' mechanism, the outcomes of the ACCC's greenwashing sweep and the ACCC's enforcement priorities for 2023/24. On the financial services front we provide an update on the status of the proposed FAR (which would expand on and replace the existing BEAR). We also provide an update on the progress of measures to further 'modernise' Corporations Act requirements and more…

The first major review of Australia’s corporate insolvency in more than 30 years is underway with public submissions now closed. The review is broad in its scale, considering the entirety of Australia’s corporate insolvency regime and its related practices and procedures.

While the review is relevant to anyone conducting business in Australia, any developments or changes to corporate insolvency laws are particularly important for businesses in financial distress or creditors looking to recoup debts they are owed.

The corporate insolvency review to date

Introduction for Insolvency & Restructuring Case Summaries 2021-2022 It gives us great pleasure to introduce our Insolvency & Restructuring Case Summaries 2021-2022.

This is the first year that we have published a collated version of the Case Summaries in addition to our regular insolvency InFocus updates. The Case Summaries have been produced in response to feedback that this would be a useful resource.

The Probuild and Virgin Australia administrations confirm that virtual meetings in external administrations are now an integral part of insolvency in a post-pandemic world. Although recent changes to the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR) provide greater flexibility, there are aspects that insolvency practitioners need to consider and Court directions may be necessary.

Corporate Australia is bracing for the long-awaited surge in insolvencies. As Australia’s largest creditor and, according to creditor reporting bureau Creditor Watch, responsible for the greatest number of company windups prior to the pandemic in 2019, the ATO can fairly be described as an influential, if not dominant, player in the restructuring and turnaround space and in corporate Australia more broadly.

The ATO effect

Our Restructuring & Insolvency Team reflects on the year, the industry trends and significant matters of 2022. The Team also looks forward as to what the next 12 months may have in store.

Contents:

What is Illegal Phoenix Activity?

The Australian Securities & Investments Commission (ASIC) defines illegal phoenix activity as activity that occurs when a new company, for little or no value, continues the business of an existing company that has been liquidated or abandoned to avoid paying outstanding debts, including taxes, creditors and employee entitlements.

The Court’s decision in Barokes Pty Ltd (in liq) [2022] VSC 642 is important because, for the first time in Australia, a Court has granted a creditor leave to bring a derivative action in the name of a company in liquidation against its liquidators. This case opens another significant gateway for creditors to seek redress for their losses.

The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has commenced an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.^[1]