In a recent decision by the Supreme Court of New South Wales regarding unfair preference claims - In the matter of Pacific Plumbing Group Pty Limited (in liquidation) [2024] NSWSC 525 – Justice Black provides guidance to liquidators on what is required to recover payments made to a third party on behalf of an insolvent company as unfair preferences.
In particular, the case highlighted that a liquidator has the burden of proof to show that:
In April 2022, the ATO began writing to batches of company directors in relation to unpaid liabilities informing them about the risk of their personal liability for unpaid company tax debts. If not actioned, directors are at risk of receiving a Director Penalty Notice (DPN).
These letters pre-DPN will continue to be sent to directors of companies if that company has not met its obligations for all or either of PAYG withholding tax, Superannuation Guarantee Charges (SGC) and GST. So far, approximately 80,000 of these letters have been sent out.
In March 2020 the Australian Government announced a series of amendments to the insolvency and bankruptcy laws as part of the wider economic response to the COVID-19 pandemic.
Those amendments were initially scheduled to end on 25 September 2020 and were then extended until 31 December 2020 to allow further breathing space for debtors.
On 1 January 2021 those amendments came to an end however most of these ameliorating changes have been kept, while some altered – possibly for the long term.
Corporate Debtors and Statutory Demands
In our 25 March 2020 Alert titled COVID-19 Insolvency Update: Temporary Relief for Financially Distressed Businesses we highlighted the then proposed urgent amendments to the Corporations Act 2001 (Cth) (Corporations Act) and the Bankruptcy Act 1966 (Cth), which the Federal Government was has now passed into law, to provide temporary relief to individuals a
The Federal Government has recently introduced the Coronavirus Economic Response Package Omnibus Bill 2020 (Bill).
Schedule 12 of the Bill will provide relief to individuals and businesses facing financial distress due to the COVID-19 crisis by effecting temporary changes to the Corporations Act 2001 (Cth) (CorporationsAct), the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and the regulations to those Acts.
Following the recently announced extension of the JobKeeper programme and the Federal Government’s Budget Update, we revisit the relief measures available to corporations experiencing financial distress during the COVID-19 pandemic, which are currently scheduled to end in September.
Temporary measures scheduled to end on 24 September 2020
This alert briefly discusses key amendments to the insolvency legislation that the federal government has enacted and how councils can protect themselves from contractor insolvency in construction contracts.
Changes to insolvency legislation
Ahead of the October budget, the treasurer has announced proposals to overhaul insolvency laws in Australia, to introduce provisions to allow struggling businesses to continue trading whilst a restructuring plan is developed. The changes, which share similarities with US Chapter 11 bankruptcy provisions, are yet to be legislated, but are proposed to commence with transitional provisions from 1 January 2021.
Insolvency in the construction industry is a perennial concern for contractors who can be thinly capitalised and depend on reliable cash flow to meet obligations to staff and suppliers.
With Commonwealth funding to Medicare Locals ceasing on 30 June 2015, now is the time for Boards of Medicare Locals to ensure that they are, and remain, solvent, now that a substantial part of their revenue flow is being terminated.