The period for submissions on wide-ranging reforms to the NSW construction industry recommended by the Independent Inquiry into Construction Industry Insolvency in NSW is closing soon.

The final report of the independent inquiry into insolvency in the NSW construction industry was released on Tuesday for public comment.

The report is lengthy and addresses a wide variety of potential causes of contractor insolvency. It makes 44 recommendations, including reforms of the NSW construction industry to reduce both the incidence of contractor insolvency and its impact on other participants in the industry.

The proposed scaling back of directors' liability provisions is good news for insolvency practitioners.

In good news for insolvency practitioners, the NSW Government formally adopted the Council of Australian Governments guidelines on "Personal Liability for Corporate Fault" as NSW policy on 31 July 2012 .

What are the "Personal Liability for Corporate Fault" guidelines?

A particular focus of the inquiry will be the consequences of such insolvencies for sub-contractors.

In the wake of a recent spate of contractors becoming insolvent, the NSW Government has announced an inquiry into insolvency in the construction industry and is seeking submissions from interested parties. Submissions to the inquiry are due by 14 September 2012.

Your insurer goes bust – can you as an insured claim the reinsurance proceeds? An important decision in the NSW Supreme Court gives useful guidance on when a court will allow departures from the statutory scheme controlling the application of reinsurance proceeds (Amaca Pty Ltd v McGrath & Anor as liquidators of HIH Underwriting and Insurance (Australia) Pty Ltd [2011] NSWSC 90).

The insurer goes broke, and there are all these claimants at the door…

The law of "shadow directors" means that a person who effectively controls a board of a company, even though that person is not a director, may find himself being legally classified as a director of the company. That carries with it the threat of legal liability for the company's insolvent trading debts in the event that the company goes into liquidation.

In December 2016 we posted on the NSW Law Reform Commission’s recommendation to replace section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Six months later, we can now confirm that section 6 is (finally) dead and herald the new era of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (Act). The new Act is now live (from 1 June 2017) and is a welcome clarification of the confusion and ambiguity caused by section 6.

In one of the most significant decisions relating to schemes of arrangement in Australia in recent years, the New South Wales Court of Appeal has dismissed an appeal challenging the composition of classes of creditors in the Boart Longyear restructuring.

The Supreme Court of New South Wales has recently handed down its decision in proceedings (“Arrium Proceedings”) brought by a number of lenders against former officers and employees of Arrium Limited and its subsidiaries (“Arrium”).

Introduction

Justice Ball’s landmark decision¹ dismissing the lenders’ claims addressed various important issues that often arise when a borrower is facing financial distress in Australia, including:

In our previous blog post, we examined the decision of the New South Wales Court of Appeal to uphold the composition of classes of creditors in the Boart Longyear restructuring by way of scheme of arrangement.