Insolvency: Out of Safe Harbour and Into Dry Dock

Australia has one of the harshest regimes for insolvent trading in the world. But its laser focus on the interests of creditors, and harsh penalties, has served to distract directors in times of distress – and arguably stood in the way of better outcomes for everyone (creditors included), The Australian Financial Review reported. Refocusing directors’ attention to the interests of the company as a whole could change that. AAt the regime’s inflexible core is section 588G of the Corporations Act, which requires every company director to prevent their company from trading while insolvent. This duty indiscriminately applies to directors of companies large and small, regardless of whether they’re on the high street or in a high tower. Read more