There is a plethora of Australian legislation which sheets home personal liability to directors and officers.
Below are some reminders of traps for directors and officers for transactions that might be undertaken in the usual course of a director or officer’s normal arrangements.
Trap 1: Super re-contribution
Some advisors propose, as a strategy for limiting superannuation death benefits tax, withdrawing superannuation balances and re-contributing that amount into super as a non-concessional tax-free contribution.
Australia has signed on to a new framework that will standardise aircraft financing transactions the world over. It’s positive news for those in Australia’s aviation industry and should lead to cheaper and easier financing of aircraft. However, in exchange, the industry may have to forego some of the benefits of Australia’s current debtor-friendly voluntary administration regime.
It also means any contracts for the purchase, operation or lease of aircraft or engines that extend beyond 2014 should be reviewed before the law changes.
Part 2 of a two-part analysis of the recommendations of the NSW Construction Industry Insolvency Inquiry. Part 1 considered the proposed NSW Building and Construction Commission.
The Inquiry aims to safeguard the interests of sub-contractors and was initiated by the NSW Government following a year marred by high levels of insolvency in the NSW construction industry.
The Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) was submitted to the Dutch parliament last year and, once adopted, introduces a framework under which tailor-made (financial) restructuring plans can be implemented outside formal insolvency proceedings.
The WHOA combines elements of the English Scheme of Arrangements, US Chapter 11 and the EU Restructuring Directive (EU 2019/1023).
The following is an overview of the WHOA's most important features.
The procedure
Italy is already implementing the Directive (EU) 2019/1023 of the European Parliament and the Council of 20 June 2019 (the “Directive”), related to the preventive restructuring frameworks, discharge and measures aiming at increasing the effectiveness of restructuring, insolvency and discharge procedures, that Member States shall implement within 17 July 2021.
As mentioned in our earlier blog, the Dutch legislator has prepared a bill – the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – introducing a framework that allows debtors to restructure their debts outside formal insolvency proceedings (the “Dutch Scheme“). We expect this highly-anticipated bill to enter into force by this summer.
On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”).
This is an extraordinary achievement given the existing differences in restructuring regimes across EU Member States.
What is the preventive restructuring framework and what are its key features?
Where there is a likelihood of insolvency (but importantly where the debtor is not yet insolvent as defined by national law), Member States must provide debtors with access to a preventive restructuring framework that enables them to restructure, with a view to preventing insolvency and ensuring their viability.
Timing and Objectives
An EU directive aimed at harmonizing Member State restructuring and insolvency laws (the “Directive”) was published in the Official Journal on June 26, 2019 and entered into force on July 16, 2019. Member States are required to adopt and publish compliant laws and regulations by July 17, 2021.