In September 2017, the Commonwealth Parliament passed the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) to amend and reform the insolvency and external administration provisions of the Corporations Act 2001 (Cth).

One of the main changes implemented by these reforms was the introduction of a ‘safe harbour’ protection for company directors.

As deleveraging to control transactions continue to be part of the legal landscape in Australia, we anticipate seeing further examples, particularly where the distressed company is a listed entity. 

The Safe Harbour reforms that became law on 19 September 2017 aim to create a better environment for the effective corporate rescue of distressed companies.

Justice Black in In the matter of Boart Longyear Limited[2017] NSWSC 537 has confirmed that section 411(16) of the Corporations Act 2011 (Cth) (the Act), can be used to provide companies proposing schemes of arrangement with appropriate protections from its creditors in a form that can be recognised under Chapter 15 of the US Bankruptcy Code.

In a previous Legal Insight, we foreshadowed potential guidance from the ASX on the interaction between the new insolvent trading safe harbour laws and the continuous disclosure obligations of a public company.

Year in Review - Australia Law in 2016

After a fraught period as an ASX listed company, including the near collapse of iron ore miner and major customer, Atlas Iron, the transport company McAleese Limited has entered voluntary administration.

SUMMARY

In the recent decision, In the matter of Mirabela Nickel Ltd (subject to deed of company arrangement) [2014] NSWSC 836, the NSW Supreme Court has granted leave to the deed administrators under section 444GA of the Corporations Act 2001 (Cth) (Act) to transfer 98.2% of the existing shares of Mirabela Nickel Ltd (Mirabela) to unsecured creditors without the consent of its shareholders.

FACTS

Introduction

General corporate

ASIC reports on corporate insolvencies 2012–2013