Corporate Law Reform
- Productivity Commission - IPA submission
The IPA is considering making a submission to the Productivity Commission on the inefficiencies and costs created by having two separate regimes for personal and corporate insolvency - separate legislation, separate policy, separate regulation. The IPA met with the Commission on 20 January. To assist in identifying and costing unnecessary regulatory burdens, the Commission has set out some... Read More »
- Treatment of payments under indemnities in a winding up
Treasury in Canberra has requested the IPA's views on whether the law should be amended to make the treatment of indemnities consistent with the treatment of contracts of insurance in a winding up under section 562 Corporations Act . Currently payments under an indemnity would be treated as property of the company available for the payment of... Read More »
- CAMAC's 'Sons of Gwalia' report
The Corporations and Markets Advisory Committee (CAMAC) has released its report Claims by shareholders against insolvent companies: implications of the Sons of Gwalia decision. The report responds to the government's request for advice on the effect of the High Court’s decision in Sons of Gwalia Ltd v Margaretic (2007) 231 CLR 160. CAMAC... Read More »
- CAMAC's report on “issues in external administration”
CAMAC has released its report on “issues in external administration”, November 2008. The IPA made submissions in May 2008 to CAMAC’s discussion paper. The CAMAC recommendations, and IPA’s position on each, are shown below. In the case of many of these recommendations, members will find more analysis in the IPA submission than in the... Read More »
- Corporations Amendment (Insolvency)
The following documents are provided to Members to assist them in complying with the amendments to the Corporations Act and with the Code of Professional Practice. Document Purpose Link Law Reform Guidance ... Read More »
- The changing role of creditors in insolvency”
The changing role of creditors in insolvency” The banking and Financial services Law Association Key Points Importance of insolvency reform: The current round of insolvency reform will simplify proceedings and provide creditors with a greater oversight role. Future issues: Sons of Gwalia, long-tail liabilities and cross-border insolvency.... Read More »
- Law Reform Speech by Hon Chris Pearce
The long awaited Corporations Amendment (Insolvency) Bill 2007 is now law. The commencement date will be advised. Please download the latest I News which summarises the impact the reforms will have on your practice . The Cross Border Insolvency Bill , dealing with... Read More »
- IPA members eligible for appointment to CALDB
New s 203(1B) of the ASIC Act now says that a person is eligible under this subsection for appointment as an accounting member of the CALDB if the person is resident in Australia and is a member of a professional accounting body or “any other body prescribed by the regulations for the purposes of this subparagraph”. Under... Read More »
- Aspects of agribusiness managed investment schemes - insolvency issues
A joint parliamentary committee report released yesterday – Aspects of agribusiness managed investment schemes – contains recommendations in relation to the insolvency of managed investment schemes. Such schemes operate through a responsible entity (RE) which must be a public company authorised to operate such a scheme: s 601FA Corporations Act . It was the insolvency of both... Read More »
- Paying dividends from profits - new s 254T
The Corporations Amendment (Corporations Reporting Reform) Act 2010 makes an important change to section 254T of the Corporations Act which says that dividends may only be paid out of profits of the company. The new section 254T provides for a 3 tiered test, that a company must not pay a dividend unless: ... Read More »
- Web-based notifications of insolvency information
In the insolvency reform package, the government has announced that the law will be reformed to"facilitate the future development of alternative methods of publication of certain insolvency related events". This refers to a proposal, considered by CAMAC back in 2008, that notices to creditors and others be published on a website. This would replace the old-fashioned and costly process... Read More »
- Model OH&S law - sign off - but will it remain local and parochial?
On 9 December 2009 Safe Work Australia signed off on the draft harmonised OH&S Act, which was approved by the Workplace Relations Ministers Council on 11 December. Importantly, section 26 now contains a definition of "due diligence" in relation to the duties of officers. In addition, officer has been defined as "an officer within the meaning of... Read More »
- Re Bosnjak; Re Jick - problem with reg 5.3A.07 - DOCA to liquidation
In the matter of Bosnjak Holdings [2009] NSWSC 565, enclosed , Justice Austin has today (19 June 2009) raised a problem with the drafting of the Corporations Regulations consequent upon the 2007 insolvency changes to the law. Coincidentally, also today, in the matter of Jick Holdings [2009] NSWSC 574, Justice White has identified the... Read More »
- Sons of Gwalia - Senate Committee inquiry not proceeding
23.7.10: We have been advised that due to the forthcoming election and the prorogation of parliament, the Senate Legal and Constitutional Affairs Committee has determined not to continue its inquiry into this Bill. This decision is consistent with the approach to inquiries during elections adopted by other Senate committees. If the Bill is reintroduced in the new parliament, the... Read More »
- Inquiry into the PPS (Consequential Amendments) Bill 2009
Inquiry into the Personal Property Securities (Consequential Amendments) Bill 2009 The IPA and others have been invited to make a submission to a Parliamentary inquiry on this Bill. The main “consequential” changes of interest to IPA members are those that will amend the Bankruptcy Act; and those that will amend the PPS Act itself, in... Read More »
- Invalidly constituted committee of inspection
20.7.10: A committee of inspection was found to be invalidly set up because a separate meeting of contributories had not been held, as required by s 548: Jindal Transworld Pty Ltd v Scottsdale Homes No 10 Pty Ltd (No 2) [2010] SASC 210. Nor was that the liquidator’s responsibility. Under sub-s (1) a creditor or contributory... Read More »
- Sons of Gwalia - reversal law released for comment
The Corporations Amendment (No 2) Bill 2010 and Explanatory Memorandum have been released as exposure drafts . The Bill proposes to 'reverse' the Sons of Gwalia decision of the High Court. The Bill proposes a new s 563A which would say: Section 563A Postponing subordinate claims (1) The... Read More »
- Insolvent trading - safe harbour proposals - IPA comment invited
IPA members are invited to assist the IPA with comments on the government's discussion paper on the operation of our insolvent trading laws in the context of attempts at business rescue outside insolvency administration. The paper outlines possible options for reform. This is in the context that, as the paper says, ‘informal work-outs play an important... Read More »
- PPS (Corporations etc) Bill 2009 - IPA member input sought
A draft exposure Personal Property Securities (Corporations and other Amendments) Bill 2009 containing the proposed PPS consequential amendments to the Corporations Act 2001 is available for comment at: www.ag.gov.au/www/agd/agd.nsf/Page/Consultationsreformsandreviews_personalpropertysecuritiesreform_PersonalPropertySecuritiesConsultation The amendments would incorporate the new PPS concepts into the Corporations Act to the extent that they are consistent with retaining... Read More »
- Corporate technical insolvency reforms - IPA submission
Further to the IPA notification to members below, the IPA has now sent to Treasury a schedule of suggested changes to Chapter 5 of the Corporations Act. These include: apparent errors in drafting - s 161A(3); unduly complex wording - a report that is "made up to a day not later than 30 days... Read More »
- CAMAC report on guidance for directors
CAMAC has published its report on Guidance for directors . The report responds to a request from Minister Chris Bowen in August 2009 for advice on whether there is sufficient guidance provided to directors to ensure that they clearly understand their roles and responsibilities and whether their performance would be enhanced by the introduction of a... Read More »
- IPA submission on the proposed Co-operatives National Law
The IPA’s submission to this inquiry is enclosed , dated 26 February 2010. Our main submissions are: i. that only registered liquidators should be appointed under the external administration provisions for insolvent cooperatives; ii. ... Read More »
- Proposed ATO phoenix reforms - IPA member comment invited
The Assistant Treasurer has announced the release of a proposals paper canvassing options to address what he calls “fraudulent phoenix activity” which he has defined as activity that involves “avoiding the payment of liabilities, often tax liabilities, through the liquidation of a company and the subsequent continuation of the business through a new company. This is... Read More »
- Judge suggests reform of directors' liabilities in insolvency
Critical comments have been made by the Victorian Supreme Court about what the Court sees as a "very hard test" for directors who seek to defend insolvency related claims. The Court has asked that its comments be drawn to the attention of the government's corporate law advisers. The IPA has itself made submissions to government recommending law reform... Read More »
- PPS Bill passed by House of Rep's on 16 September
The Personal Property Securities Bill was passed by the House of Representatives on Wednesday 16 September 2009. There is still an opportunity to comment on the Bill before it is considered by the Senate. Comments are invited on the PPS Bill by 30 September 2009. If any member has issues they wish... Read More »
- Corporate insolvency law changes
The government has announced a package of reforms to corporate insolvency laws. Shareholder creditor claims The government will amend the Corporations Act to reverse the effect of the High Court’s decision in Sons of Gwalia v Margaretic which determined that, in a corporate winding up, certain compensation claims by creditor shareholders against the... Read More »