For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments

Recent Developments

Small business is undoubtedly the lifeblood of economies, more so where those economies are emerging and developing. The promotion and nurturing of entrepreneurship is a key factor in economic success, not just for those entrepreneurs, but for the wider society, which, as stakeholders, benefits from the generation and distribution of wealth through economic and social policy. One unresolved question, however, is how to treat MSMEs (micro-, small- and medium-enterprises) in insolvency.

Both the corporate voluntary arrangement and judicial management, together with the Companies (Corporate Rescue Mechanism) Rules 2018 (“Rules”), came into force earlier this year on 1 March 2018 with the gazetting of notice P.U. (B) 106/2018. 

We have previously discussed the insolvency law policy and procedure, touching briefly on judicial management and corporate voluntary arrangement. We will now look at the rules applicable for the application for these two rescue mechanisms. 

Corporate Voluntary Arrangement

GUIDE TO RESTRUCTURING, TURNAROUND AND INSOLVENCY IN ASIA PACIFIC OCTOBER 2018

被称为“中国民办教育破产第一案”的遵义中山中学破产案，曾经一度在民办教育领域闹的沸沸扬扬，立下豪言壮志的校长刘永松经营失败锒铛入狱，引发嘘声一片。关联到破产理论和实务，对民办学校破产的程序适用、各种类型债权清偿顺位及法律依据等众多问题，莫衷一是，难有定论。四川省法院系统层报最高人民法院，最高人民法院专门就该案处理召开审判委员会会议，讨论中山中学破产案的程序适用及债权清偿等重大疑难问题。最高人民法院于2010年12月16日发布了《关于因资不抵债无法继续办学被终止的民办学校如何组织清算问题的批复》，对相关问题进行了答复。该案以遵义一中1.7亿元接盘破产财产，破产清算偿债，才得以尘埃落定。[1]虽然该案顺利办结，但隐藏在案件背后对民办教育机构的市场退出路径、《民办教育促进法》和《企业破产法》的冲突和适用、不同债权类型的清偿顺位等疑云仍挥散不去。

This is the twenty-ninth in our series of General Counsel Updates which aim to summarise major developments in key areas.

The BLG Monthly Update is a digest of recent developments in the law which Neil Guthrie, our National Director of Research, thinks you will find interesting or relevant – or both.

Mills Oakley is a leading national law firm with offices in Melbourne, Sydney, Brisbane, Canberra and Perth. With over 100 partners and more than 670 staff, we offer strong expertise across all key commercial practice areas.

From origins in Melbourne in 1864, Mills Oakley has grown to become a domestic leader in legal services with a client base of ASX-200 listed companies, mid-sized corporations, the public sector and not-for-profit organisations.

The impact of COVID-19 on businesses will undoubtedly require directors to consider formal restructuring and insolvency options, including the appointment of administrators. Administrators are faced with the challenge of assessing a company’s options and forming a recommendation in an era of high market uncertainty. Both proposing a holding Deed of Company Arrangement (DOCA) and extending the convening period are being discussed as options to provide administrators with more time to undertake these tasks. In this article we consider the scope and limitations of each strategy.

Directors of Australian companies face significant personal monetary – and potential criminal and adverse professional – consequences if they allow the company to trade whilst insolvent.

Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.

Accordingly, frequent assessment of a company’s solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.