Oct 122018
 

On 1 October 2018 the Australian Securities and Investments Commission (ASIC) released a draft of a new Report as to Affairs (commonly known as a RATA). A copy of this form, which includes detailed instructions, may be downloaded from my website or from this ASIC journal.

The new name of the report is to be Report On Company Activities and Property (ROCAP). ASIC intends releasing it in November 2018.

Analysis

Form apges

The following comments outline my preliminary analysis of the draft. Continue reading »

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Date set for Supreme Court to hear opposition to CBS takeover of Ten

 Corporate Insolvency, External administration  Comments Off on Date set for Supreme Court to hear opposition to CBS takeover of Ten
Sep 282017
 

SOURCE:  The Australian, 28 September 2017, by Dana McCauley, Media Writer, Sydney. Picture: Renee Nowytarger.

Channel 10 emblem

Creditors of Ten and its shareholders and staff will have to wait until at least November to discover the network’s fate.

An application for Ten Network Holdings’ proposed takeover by American broadcaster CBS has been “tentatively” listed for a three-day hearing on October 31, when the Supreme Court of NSW will hear any final shareholder opposition to the deal.

Bruce Gordon, who is yet to signal whether he will oppose the application by Ten’s administrator KordaMentha to transfer the company’s shares to CBS, did not appear at a directions hearing yesterday, when Justice Ashley Black set a provisional timetable for the matter.

Mr Gordon is understood to be mulling the next step in his ­attempt to stop CBS taking over Ten after its creditors voted this month in favour of the deal.

In setting the hearing date, Justice Black noted that interested parties may need time to ­respond to an expert report due to be filed with the Australian ­Securities & Investments Commission by KordaMentha on October 10, giving any other interested parties three days to file notices of appearance. Continue reading »

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Sep 112017
 

Logo with border

With the commencement on 1 September 2017 of the delayed parts of the Insolvency Law Reform Act 2016 (the ILRA), the Australian Securities and Investments Commission (ASIC) has updated some of the Information Sheets which it makes available on its website to the general public.

ASIC says  that “Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.”

Over time ASIC has issued about 36 insolvency information sheets and flow charts (click here for my list).  Below is a list of 15 which have recently been reissued.

In the past, nearly all ASIC’s information sheets have been available to download as printable sheets in PDF file format.  However, this facility has not (yet) been provided with the updated/reissued sheets, which are only available as text on ASIC web pages. The links below are to the relevant website pages.

ASIC INSOLVENCY INFORMATION SHEETS – REISSUED 1 SEPTEMBER 2017
Form Number
Title of Sheet
Date Updated
Link to ASIC site
INFO 39 Insolvency information for directors, employees, creditors and shareholders

1/9/2017

INFO 39
INFO 41 Insolvency: A glossary of terms 1/9/2017 INFO 41
INFO 42 Insolvency: a guide for directors 1/9/2017 INFO 42
INFO 43 Insolvency: a guide for shareholders 1/9/2017 INFO 43
INFO 45 Liquidation: a guide for creditors 1/9/2017 INFO 45
INFO 46 Liquidation: a guide for employees 1/9/2017 INFO 46
INFO 53 Providing assistance to external administrators – Books, records and RATA 1/9/2017 INFO 53
INFO 54 Receivership: a guide for creditors 1/9/2017 INFO 54
INFO 55 Receivership: a guide for employees 1/9/2017 INFO 55
INFO 74 Voluntary administration: a guide for creditors 1/9/2017 INFO 74
INFO 75 Voluntary administration: a guide for employees 1/9/2017 INFO 75
INFO 84 Independence of external administrators: a guide for creditors 1/9/2017 INFO 84
INFO 85 Approving fees: a guide for creditors 1/9/2017 INFO 85
INFO 152 Public comment on ASIC’s regulatory activities 1/9/2017 INFO 152
INFO 212 Illegal phoenix activity 1/9/2017 INFO 212
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Those regulated by ASIC are to pay ASIC for the privilege

 ASIC, Corporate Insolvency, External administration, Insolvency Law, Regulation  Comments Off on Those regulated by ASIC are to pay ASIC for the privilege
May 102017
 

An idea put forward by the Australian Government about a year ago has almost become a reality with the introduction into Parliament on 30 March 2017 of the ASIC Supervisory Cost Recovery Levy Act 2017 to establish an industry funding model for the Australian Securities and Investments Commission (ASIC) and with the release on 4 May 2017 of draft regulations for consultation.

The idea –  to enable the recovery of the regulatory costs of ASIC by imposing a levy on persons regulated by ASIC – was described in Parliament by the Assistant Minister to the Treasurer (Mr Sukkar) as follows:

Industry funding of ASIC will mean that … those entities that create the need for that regulation will be the ones who pay for it—as opposed to Australian taxpayers—who too often bear the cost of financial sector misconduct.  Further, because each regulated subsector will only ever pay an amount equal to its costs of supervision, industry funding will promote equity between different regulated entities. This is because certain industry subsectors will no longer cross-subsidise the costs of the regulation of other sectors.

The laws are due to take effect on 1 July 2017.  General news article: “Companies face levy in ASIC funding overhaul”.

ASIC Supervisory Cost Recovery Levy Regulations 2017

The closing date for submissions regarding the proposed Regulations is 26 May 2017.

In releasing its consultation paper for the Regulations the Treasury department said:

The Government is seeking stakeholder views on the draft regulations necessary to support the industry funding model, which will recover (the Australian Securities and Investments Commission’s)  regulatory costs though annual levies and fees-for-service. The proposed regulations are to establish the mechanisms that will be used to calculate the levies payable by each class of regulated entity, each financial year.

There are 6 industry sectors covered by the Regulations. Each sector has several industry subsectors.  In all there are 48 industry subsectors. Each subsector  describes the “leviable entity” that is included in the industry subsector.

Registered liquidators levy

Registered liquidators are in the industry sector named Corporate, and are leviable entities in a subsector named, not surprisingly, registered liquidators.

The levy to be imposed on each registered liquidator in a financial year is the sum of:

(a)  the minimum levy component (which is proposed to be $2,500); and

(b)  the graduated levy component.  The graduated levy component is a variable amount depending on each entity’s share of the total number of notifiable events for the subsector.  The Regulations define what constitutes a notifiable event (see below).  ASIC will prescribe its regulatory costs and the total number of these notifiable events for the subsector as part of its annual legislative instrument. Continue reading »

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May 082017
 

Before it is due to come into effect on 1 September 2017, section 60-20 of the Insolvency Practice Schedule (Corporations) (Australia) is to be amended.

Under the heading “Refining the Insolvency Law Reform Act 2016”, the Minister for Revenue and Financial Services has released draft legislation of amendments to the Corporations Act 2001 and Bankruptcy Act 1966.

The professional association representing insolvency practitioners has welcomed the amendments. The Australian Restructuring Insolvency & Turnaround Association (ARITA) says (on its website 5/5/2017):

The section would (have) require(d) external administrators and trustees to obtain consent from creditors prior to related entities obtaining any profit or advantage from any administration or estate – effectively requiring Insolvency Practitioners to seek creditor approval for their own firms to work on an appointment. We are delighted that Treasury have announced draft legislation specifically to resolve this issue. It is now clear that once remuneration is approved, further approval to share that remuneration with related parties (e.g. an Insolvency Practitioner’s firm or partners) is not required …. ARITA has been working very hard behind the scenes on this under strict confidentiality. The draft legislation is on The Treasury’s website for consultation. This is a significant win for the profession, achieved by ARITA.


Illustration of Change to Corporate Insolvency Law

I have set out below an illustration of the changes that are being made to section 60-20 of the Insolvency Practice Schedule (Corporations). Although “interested parties” have been invited to make a submission regarding the draft legislation by 17 May 2017, it is doubtful whether there will be any change to the draft. Continue reading »

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New ASIC guide on how to become, and behave as, a registered liquidator

 ASIC, Corporate Insolvency, External administration, Insolvency practices, Regulation  Comments Off on New ASIC guide on how to become, and behave as, a registered liquidator
Mar 022017
 

Registered Liquidators: Registration, disciplinary actions and insurance requirements.

ASIC Regulatory Guide RG258, Issued: 1 March 2017

Australian Securities and Investments Commission:

This guide is for individuals who are or wish to become registered liquidators under … the Corporations Act 2001 …. This guide explains how to apply for registration as a liquidator, including the requirements that must be met to become a registered liquidator. This guide also explains the renewal of registration process, the disciplinary and other actions a registered liquidator may be subject to and our policy on adequate and appropriate insurance.

CLICK HERE to read or download a copy of ASIC’s Regulatory Guide RG 258.

——————————————————

Contents of RG 258

Continue reading »

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Nov 122015
 

Transcripts have now been published for all of the public hearings of the Senate inquiry into insolvencies in construction industry. Phoenixing of companies is the main topic discussed. Several insolvency practitioners have given evidence, and at the hearing in Sydney on 28th September the insolvency profession was criticised by the leading participant, Senator Doug Cameron. At the public hearing in Melbourne on 29th September the Walton Constructions case was discussed in detail by the insolvency practitioners initially appointed as external administrators.

A list of the public hearings and those who appeared as witnesses is provided below. Continue reading »

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ASIC winds up more abandoned companies to help employees

 ASIC, Corporate Insolvency, External administration, Insolvency Statistics  Comments Off on ASIC winds up more abandoned companies to help employees
Oct 262015
 

Some directors of insolvent companies abandon their companies rather than adopt the proper course, which is to put the company through formal liquidation under the Corporations Act.

The Australian Securities and Investments Commission (ASIC) recently (21 October 2015) published a list of the latest abandoned companies that it has placed in liquidation under the special powers provided in section 489EA of the Corporations Act 2001. This brings to 60 the total of such company liquidations.

Were it not for special powers given to ASIC, abandonment of a company would cause employees who had not been paid their wages, leave and other entitlements to miss out on the compensation administered through the Australian Government’s Fair Entitlements Guarantee scheme (FEG), because such financial assistance is only available to employees of businesses that have gone into liquidation (or bankruptcy in the case of non-corporate employers). So putting an abandoned company into liquidation gives unpaid employees access to the FEG compensation. Unpaid employees of an abandoned companies can submit a request to ASIC to wind up the company.

The latest group of 10 abandoned companies owed at least 15 employees a total in excess of $429,000 in employee entitlements. They are:

LATEST LIST OF ABANDONED COMPANIES
Source: ASIC Media Release 15-305MR, 21-10-2015

Company Name

State

Adelaide Commercial Furniture Pty Ltd SA
JBKM Ventures Pty Ltd QLD
New Energy Technologies Pty Ltd NSW
Rifam Pty Ltd VIC
Let it Rain Pty Ltd NSW
Focus on Training Pty Ltd VIC
YQ Trading Pty Ltd NSW
Parklane Building Corporation Pty Ltd NSW
Sureline Training Services Pty Ltd WA
Australian Veterinary Hospitals (South Australia) Pty Ltd NSW

Apart from the names of the liquidators appointed, this is the only information supplied by ASIC. (The “corporate veil”, or something like it, seems to require that the identity of the company directors be kept confidential.)

As to the costs per company, ASIC said in January 2013:

“The cost of taking winding-up action is generally estimated to be about $15,000. This figure comprises ASIC’s costs and the liquidator’s remuneration.” (Reg Guide 242)

One can only hope that the liquidators are recovering company assets to pay the liquidation costs, or that the directors are penalised in some way for making taxpayers foot the bill.

The 60 abandoned companies wound up by ASIC since 2013 owed a total of 213 employees more than $2.9 million in entitlements.

END OF POST

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Government contemplates imposing a regulation levy on external administrators

 ASIC, Corporate Insolvency, External administration, External administrators, Regulation  Comments Off on Government contemplates imposing a regulation levy on external administrators
Aug 312015
 

UPDATE TO THIS POST: In November 2016 the Treasury issued a revised proposal for consultation. See my blog titled “Levy on registered liquidators and other industries to help fund ASIC”.

A Government levy on registered liquidators is included in a draft proposal to adopt an “industry funding” model, or user-pays system, for the Australian Investments and Securities Commission (the ASIC). The levy is intended to recover costs incurred by the ASIC in regulating registered liquidators.

The Consultation Paper, issued on 28 August 2015, estimates that a flat levy on registered liquidators:

“… would equate to around $12,700 per year and some liquidators would potentially pay a high proportional fee relative to their costs of regulation.”

The paper discusses, as another option, the merits of the levy being based on “assets realised”. It states that one point in favour would be that:

“Levying liquidators on the basis of ‘assets realised’ would promote greater harmonisation between bankruptcy and corporate insolvency laws. It would be similar to the asset realisations charge administered by the Australian Financial Security Authority.”

In bankruptcies the liability to pay the asset realisations charge is that of the practitioner, but the amount of charge paid is borne by the estate or administration. This aspect is not discussed in the Consultation Paper. But presumably if the ASIC levy follows the bankruptcy scheme, the levy will be paid from funds held or realised by the company under external administration. Continue reading »

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