Nov 282014

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Bill 2014  has, in its 240 pages dealing with corporate insolvency,  so many proposed changes in the form of amended, repealed, omitted, added and substituted words, items, definitions and sections, and so many additional parts, divisions, subdivisions, schedules and transitional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)



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!

________________________ END OF POST ____________________________

Print Friendly, PDF & Email

Sorry, the comment form is closed at this time.