Yes is the answer! On 12 July 2023, the Parliamentary Joint Committee on Corporations and Financial Services published its report regarding corporate insolvency in Australia.
Objective of the inquiry
The committee’s inquiry assessed how effective the current corporate insolvency regime is at providing benefits to, and protecting, stakeholders as well as the Australian economy. It looked at a number of aspects including:
In an earlier article we discussed The Insolvency Service's proposals for the UK to be an early adopter of two new "model laws" published by UNCITRAL relating to insolvency, namely the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ) and the Model Law on Enterprise Group Insolvency (MLEG).
The Federal Labour Court (Bundesarbeitsgericht, BAG) had to decide in which case a social compensation plan endowment by the conciliation committee is economically unjustifiable for a company outside of insolvency. This shall be the case if the fulfilment of the social compensation plan obligation would lead to illiquidity, balance sheet over-indebtedness or an unacceptable reduction of the company's equity. If the endowment was economically unjustifiable, the discretion of the conciliation committee was exceeded and the social compensation plan therefore invalid.
In certain circumstances the official liquidator of a Cayman company may be able to take action to recover assets which have been transferred in the run up to the company’s insolvency. It is important for those concerned with the affairs of a Cayman company in the twilight of insolvency to be aware of the statutory powers available to the official liquidator and the Grand Court in the Cayman Islands.
Summary
The Parliamentary Joint Committee on Corporations and Financial Services inquiry into corporate insolvency in Australia tabled its final report to the Australian Parliament on 12 July 2023.
Key takeouts
The three year review of CIGA (the Corporate Insolvency and Governance Act) published by the Insolvency Service suggests that we might see changes to the corporate moratorium process – will these address concerns about the process and encourage more insolvency practitioners to recommend its use?
A company must apply for insolvency in Germany if it is either illiquid and/or over-indebted. Illiquidity must be confirmed where the debtor is not capable of meeting at least 90 % of all claims with its liquid assets within 3 weeks (section 17 of the German Insolvency Code).
Real estate assets – effect on liquidity
The Court of Appeal in Braunschweig has recently considered whether a debtor was insolvent due to illiquidity where it owned extensive real estate assets.
As far as they go, restructuring plans have worked well since they were first introduced 3 years ago. This is reflected in the most recent review of CIGA published by the Insolvency Service which reflects favourably on this new insolvency measure. However, there are still some barriers to its use.
Government concludes that the permanent Corporate Insolvency and Governance Act 2020 measures have been "broadly welcomed", although possible refinements identified A 'Post-Implementation Review' carried out by the Insolvency Service has concluded that the restructuring plan, the standalone moratorium, and the suspension of contractual termination (ipso facto) measures introduced by the Corporate Insolvency and Governance Act 2020 (CIGA) have all been broadly welcomed by stakeholders and are seen as positive additions to the UK's insolvency and restructuring framework. The review
Key Legislations
(1) The Insolvency Law 2020; (2) The Insolvency Rules 2020 issued by the Union Supreme Court of Myanmar; and (3) The Notification No. 95/2020) dated 3rd November 2020 of the Directorate of Investment and Company Administration (“DICA”).
Voluntary Winding Up
The shareholders of a company can voluntarily wind up the company by holding a general meeting and passing a resolution to wind up the company under Section 147(a) of the Insolvency Law.