A gift of new insolvency legislation

Proposals for significant changes to Australia’s insolvency laws slipped out of the Government pipeline and into the public arena for comment just prior to Christmas.

According to the Government’s media release (19/12/2012):

• the proposed laws aim at “reforming and modernising the way insolvency professionals are registered, disciplined and regulated”;
• they will “improve regulatory oversight of the insolvency profession, improve value for money for recipients of insolvency services, and enhance creditor rights across all forms of insolvency administration (and in particular) provide greater powers for creditors to remove practitioners and curb excessive fees, and therefore deliver better outcomes for creditors, many of whom are small businesses”;
• the laws are “an important element (in) the alignment of personal and corporate insolvency regulation in a number of key areas (and) seek to deliver greater consistency and less complexity for employees, creditors and practitioners, who all need to interact in the event of a personal or corporate insolvency”;
• they show the Government is committed to “restoring the community’s confidence in the effective regulation, high professional standards, transparency and accountability of the insolvency profession following recent high profile cases of misconduct by corporate insolvency practitioners”.

The proposed laws are contained in the Insolvency Law Reform Bill 2012.

Interested parties have until 8 March 2013 to make a submission concerning the Bill.

The Exposure Draft of the Bill and the Explanatory Material are available for download from the webpage at http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Insolvency-Law-Reform-Bill

The address for submissions is also given at that webpage.

To see the full media release by the Government  release click HERE.

A second tranche of the Bill – with consequential amendments to corporate and personal insolvency legislation as a result of the reforms, as well as transitional measures – is expected to be released soon.

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