The exposure draft of Australia’s Insolvency Law Reform Bill 2014 has, in its 240 pages dealing with corporate insolvency, so many proposed changes in the form of amended, repealed, omitted, added and substituted words, items, definitions and sections, and so many additional parts, divisions, subdivisions, schedules and transitional provisions, that only an expert with tremendous devotion to the task would be able to understand what it all means and see what the new law governing corporate insolvencies is going to look like. The rest of us will probably have to wait until this Bill is passed and a compilation of the Corporations Act 2001 that takes into account all these changes is prepared.
Even then it appears we’ll see quite a mishmash of insolvency laws scattered throughout the Corporations Act and its Rules and Regulations. Perhaps our corporate insolvency laws need a real clean up, like gathering all existing provisions together and moving the lot (with amendments and additions) out of the Corporations Act and into a new, specific Act, such as a Corporate Insolvency Act. But that’s a discussion for another day.
However, one of the changes proposed by the Insolvency Law Reform Bill will take us a little in this direction. Several rules that are currently scattered throughout the Corporations Act will be encompassed in a new Division 4 – which is to be called the Insolvency Practice Schedule (Corporations). It will be added to Part 5.9 (Miscellaneous) of Chapter 5 (External Administration) of the Corporations Act 2001. The table below shows the layout of this new Division and points to the pages of the Bill’s Exposure Draft where the text of the laws is set out. I hope it’s of some help to those trying to understand the proposed changes.
Division 4—Insolvency Practice Schedule (Corporations)
Part |
Division |
Exposure Draft – pages |
|---|---|---|
| 1-Introduction | 1-Introduction | 151 to 152 |
| 5-Definitions | 153 to 158 | |
| 2-Registering and disciplining practitioners | 10-Introduction | 158 to 159 |
| 15-Register of liquidators | 159 to 160 | |
| 20-Registering liquidators | 160 to 168 | |
| 25-Insurance | 169 | |
| 30-Annual liquidator returns | 170 | |
| 35-Notice requirements | 171 to 172 | |
| 40-Disciplinary and other action | 172 to 189 | |
| 45-Court oversight of registered liquidators | 189 to 190 | |
| 50-Committees under this Part | 190 to 195 | |
| 3-General rules relating to external administrations | 55-Introduction | 195 |
| 60-Remuneration and other benefits received by external administrators | 196 to 208 | |
| 65-Funds handling | 208 to 215 | |
| 70-Information | 216 to 234 | |
| 75-Meetings | 235 to 244 | |
| 80-Committees of inspection | 244 to 256 | |
| 85-Directions by creditors | 256 to 257 | |
| 90-Review of the external administration of a company | 257 to 269 | |
| 4-Other matters | 95-Introduction | 270 |
| 100-Other matters | 270 to 271 | |
| 105-The Insolvency Practice Rules *** | 271 to 272. (Note: To be made by the Minister.) |
*** The Bill’s Exposure Draft mentions the Insolvency Practice Rules many times, stating how and where they may be used to clarify, interpret, amplify, refine and flesh out the insolvency laws. A separate document – a 27 page Proposals Paper for Insolvency Practice Rules – has been released for comment (closing date 19/12/2014). The part of the Paper that applies to Corporate Insolvency is pages 16 to 27.
Note: There is an official Explanatory Material to the exposure draft of the Bill. It is 228 pages long, but only 115 pages concern changes to corporate insolvency laws!
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