May 182017
 

professional-associationA new professional association for Australian insolvency practitioners  – named the Association of Independent Insolvency Practitioners (AIIP) – has been formed and is currently endeavouring to recruit as members those registered liquidators and trustees in bankruptcy who work as sole practitioners or in small firms.

In an email circular on 4 May 2017 (see below), Nicholas Crouch, a Sydney liquidator and registered trustee in bankruptcy, acting for the AIIP, stated that “80 of the 350 small firm liquidators and trustees in Australia have joined AIIP”. The annual membership fee has been set at just $20.

Also, the AIIP plans to create – for use in company liquidations, voluntary administrations and receiverships and in personal bankruptcy – sets of  precedent or pro forma letters, forms, checklists, etc.,  that fulfil the requirements of the new insolvency legislation. It estimates that the price per practitioner will be about $2,000.  This is far less than amounts charged by existing suppliers (CORE IPS and CCH).

It is not clear whether the AIIP sees itself as an alternative or an adjunct to the Australian Restructuring Insolvency and Turnaround Association (ARITA), which is the peak body representing insolvency practitioners.  ARITA describes itself as “Australia’s leading organisation for restructuring, insolvency and turnaround professionals.”  Recently ARITA has greatly enhanced its power and prestige as a result of insolvency legislation classing it as an “industry body” and giving it an important role in the official registration  of  liquidators and bankruptcy trustees.

But it seems a significant number of insolvency practitioners are not happy with the direction that ARITA has taken. Dissatisfaction with the association  relates to  a perception that it is dominated by large insolvency firms  (supposedly leading to a focus on issues that are of interest to them),  its decision to admit lawyers, bankers and academics as members, and its high membership fee.

Text of AIIP email to liquidators and trustees in bankruptcy

Dear Fellow Liquidator/Trustee in Bankruptcy

A new liquidator’s club has been established. The objective of the Association of Independent Insolvency Practitioners (“AIIP”) is to encourage small insolvency firms to collaborate and develop best practice procedures and precedents for its members.

To date, 80 of the 350 small firm liquidators and trustees in Australia have joined AIIP.

AIIP is a not for profit association.

Membership of AIIP is limited to registered liquidators and bankruptcy trustees.

I invite you to join AIIP by contacting Stephen Hathway or Ginette Muller as follows:
[deleted]

The annual membership is $20 and an application form is attached.

Discussion groups have been established in Sydney & Brisbane and AIIP hopes to roll out new discussion groups in each capital city as soon as practicable.

New Precedents For Your Firm

AIIP has a committee that is developing a set of liquidation, VA, receivership & bankruptcy precedents that will be compliant with the new laws.

AFSA & ASIC have agreed to consider, but not endorse, the AIIP precedents when they are finalised.

AIIP members will be able to purchase and immediately use the new precedents or use the AIIP precedents as a guide when amending their own existing precedents.

The projected cost of the precedents is uncertain, but my preliminary estimate is about $2k per member.

I am hopeful the costs can be reduced through increasing the AIIP’s membership. I encourage you to invite other small firm insolvency practitioners to join AIIP.

If you wish to offer assistance to this project please advise me.

ASIC & AFSA Review Of AIIP Precedents

On 25 November 2016, Senator Williams assisted the AIIP by asking the ASIC Chairman and 3 ASIC Commissioners who were present at the Federal Government’s Joint Parliamentary Committee on Corporations and Financial Services, if ASIC would assist AIIP with our precedents project.

Senator WILLIAMS:  I have a couple of questions, Mr Price, on insolvency. With the new insolvency laws, every insolvency firm must update its precedents and templates. This is a massive and costly task. I know of a group of 40 independents, a small firm of liquidators. Small firms are creating one set of documents that they will all use as templates. It is an industry first. This will save ASIC work. Is ASIC prepared to work with this group to develop these templates?

ASIC Commissioner Price responded as follows:

Mr Price:  Certainly. We would be happy to discuss with groups that are thinking about that.
….
AIIP is very grateful for the assistance of Senator Williams, ASIC & AFSA.

AIIP recognises this is a historic opportunity for all small firm Insolvency practitioners to work with the regulators to produce best practice documents which will assist both the regulators and the small firm insolvency practitioners by raising the standard of practice and reducing the cost of compliance.

ARITA has declined to work with AIIP on this project.

CCH is in preliminary discussions with AIIP and they may offer their assistance with the precedent project.

Expressions of Interest

Kindly advise me by return email if you are interested in purchasing the AIIP precedents ….

 


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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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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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Jun 112015
 

Tax Checklist for IPs
The Australian Restructuring Insolvency and Turnaround Association (ARITA), with the help of professional services firm PricewaterhouseCoopers Australia (PWC), has published a tax guidance checklist to assist insolvency practitioners with identifying tax issues and their obligations on taking insolvency appointments. (Publication date 10 June 2015)

The checklist has 57 questions, alerts, recommendations and tasks concerning income tax, goods and services tax, fringe benefits tax, PAYG withholding, and superannuation guarantee.

ARITA suggests that “Members should note that while ARITA will endeavour to ensure that this guidance is kept up to date, tax is an area subject to constant change and the guidance is current, to the best of our knowledge, as at the date included in the footer of the document. Members should ensure that they are always using the most current version of the guidance”.

The checklist is intended to provide assistance and help to insolvency practitioners in the complicated field of tax compliance. There is no suggestion from ARITA that use of their tax guide is mandatory or necessary or even recommended.

Tax Guide part

Extract from ARITA tax guide

Access to the full guide is available through the ARITA website: CLICK HERE.


Update 14 July 2015:

From ARITA on 13 July:

ARITA has received a number of queries from members regard the relevant PAYG Withholding Rates for dividends paid to employees by external administrators in light of the increase to the Medicare Levy.

On consultation with the ATO, we have been advised that the 2005 Notice of Variation is still current and the 31.5% standard rate still applies and will continue to do so until the notice of variation ceases on 1 October 2015.

The ATO further advises that it is looking to renew the notice but before that occurs will consult with relevant stakeholders, including ARITA and external administrators, about whether changes need to or should be made to the current notice, including any changes to the rates on the notice.


 

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Mar 052015
 

A set of “policy positions” on insolvency law and practice has just been issued by Australia’s insolvency practitioners association – the Australian Restructuring Insolvency and Turnaround Association (ARITA).

The policies are titled:

  • Policy 15-01: ARITA Law Reform Objectives (Corporate)
  • Policy 15-02: Aims of insolvency law
  • Policy 15-03: Current Australian corporate restructuring, insolvency and turnaround regime and the need for change
  • Policy 15-04: Creation of a Restructuring Moratorium (Safe Harbour)
  • Policy 15-05: Stronger regulation of directors and creation of a director identification number
  • Policy 15-06: Advocate for Informal Restructuring
  • Policy 15-07: Reworked Schemes/Voluntary Administration regimes to aid in the rehabilitation of large enterprises in financial distress
  • Policy 15-08: Extension of moratorium to ipso facto clauses
  • Policy 15-09: Streamlined Liquidation for Micro Companies
  • Policy 15-10: Micro Restructuring
  • Policy 15-11: Pre-positioned sales

ARITA’s 17-page paper – named Policy Positions of the Australian Restructuring Insolvency and Turnaround Association – is the final version of its discussion paper, A Platform for Recovery 2014.  It is attached to its submission on 2 March 2015 to the Productivity Commission’s public inquiry into ” barriers to setting up, transferring and closing a business”.

It seems ARITA’s policy positions paper is not yet (mid-day 5/3/15) published as a separate document on ARITA’s website.  However, I have created a copy, which is available on my website now.

ARITA’S full 59-page submission to the Productivity Commission is available on its site, as is its useful summary of the key points made in the submission. ARITA says that the policies in the Policy Positions paper form the key basis of ARITA’s submission to the Productivity Commission.

 


Other link: To the website of the Productivity Commission’s  Business Set-up, Transfer and Closure inquiry.


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Dec 092014
 

Under the Insolvency Law Reform Bill 2014 the insolvency practitioners association and the accountants associations are to be granted the right to formally refer registered liquidators who they suspect are guilty of misconduct to the Australian Securities and Investments Commission to consider using its disciplinary powers.

Disciplinary-action The following table sets out the proposed legislation by using extracts from the Bill and related official material.

SUBJECT: DISCIPLINE OF REGISTERED LIQUIDATORS:
POWER OF INDUSTRY BODY TO GIVE INDUSTRY NOTICE

SELECTED EXTRACTS FROM THE DRAFT BILL, PROPOSED RULES, ETC.
SOURCE OF TEXT
Subdivision G of Division 40 provides that an industry body will be able to provide information about potential breaches of the law by a liquidator, and also be able to expect a response from ASIC on the outcome of that information provision.
The following industry bodies are proposed to be prescribed bodies:
• Australian Restructuring Insolvency & Turnaround Association;
• CPA Australia;
• Institute of Chartered Accountants in Australia; and
• Institute of Public Accountants.
Insolvency Practice Rules Proposal Paper,
page 19, para 110
An industry body (prescribed in the Insolvency Practice Rules) may lodge a notice (an industry notice) stating that the body reasonably suspects that there are grounds for ASIC to take disciplinary action against a registered liquidator. The industry body must identify the registered liquidator and include the information and copies of any documents upon which the suspicion is grounded.

ASIC must consider the information and documents included in the industry notice and take action as follows:

• if ASIC decides to take no action ASIC, must give the industry body a notice within 45 business days after the industry notice is lodged;
• however, such a notice does not preclude ASIC from taking action based wholly or partly on the basis of information in the industry notice of the following kind:
– suspending or cancelling the registration of the registered liquidator;
– giving the registered liquidator a show cause notice; or
– imposing a condition on the registered liquidator;
• if ASIC does take action based wholly or partly on the information included in an industry notice, ASIC must give the industry body notice of that fact.

An industry notice is not a legislative instrument.

An industry body is not liable civilly, criminally or under any administrative process for giving an industry notice if the body acted in good faith and the suspicion that the body holds in relation to the subject of the notice is a reasonable suspicion.

A person who makes a decision in good faith as a result of which an industry body gives an industry notice is not civilly, criminally or under any administrative process for making the decision.

A person who gives information or a document in good faith which is included, or a copy of which is included, in an industry notice is not liable civilly, criminally or under any administrative process for giving the information or document.

Explanatory Material, pages 140-141,
paras 6.67 to 6.70
An industry body (which will be prescribed in the Insolvency Practice Rules) may give ASIC an ‘industry notice’ stating that the industry body reasonably suspects that there are grounds for ASIC to take disciplinary action in relation to a registered liquidator.

ASIC is required to notify the industry body whether or not it has decided to take action in relation to the matters in the industry notice.

An industry body is not liable civilly, criminally or under any administrative process if the body acted in good faith and its suspicion in relation to the subject of the notice is a reasonable suspicion.

A person who makes a decision in good faith as a result of which an industry body gives a notice is not liable civilly, criminally or under any administrative process. Similarly, a person who in good faith provides information or gives a document which is included in an industry notice, or a copy of which is included, is not liable civilly, criminally or under any administrative process.

Explanatory Material, Comparison of key features
of new law and current law, page 125
Notice by industry bodies of possible grounds for disciplinary action

Industry body may lodge notice
(1) An industry body may lodge with ASIC a notice in the approved form (an industry notice):
(a) stating that the body reasonably suspects that there are grounds for ASIC:
(i) to suspend the registration of a registered liquidator under section 40-25; or
(ii) to cancel the registration of a registered liquidator under section 40-30; or
(iii) to give a registered liquidator a notice under section 40-40 (a show-cause notice); or
(iv) to impose a condition on a registered liquidator under another provision of this Schedule; and
(b) identifying the registered liquidator; and
(c) including the information and copies of any documents upon which the suspicion is founded.

ASIC must consider information and documents
(2) ASIC must consider the information and the copies of any documents included with the industry notice.

ASIC must give notice if no action to be taken
(3) If, after such consideration, ASIC decides to take no action in relation to the matters raised by the industry notice, ASIC must give the industry body written notice of that fact.

45 business days to consider and decide
(4) The consideration of the information and the copies of any documents included with the industry notice must be completed and, if ASIC decides to take no action, a notice under subsection (3) given, within 45 business days after the industry notice is lodged.

ASIC not precluded from taking action
(5) ASIC is not precluded from:
(a) suspending the registration of a registered liquidator under section 40-25; or
(b) cancelling the registration of a registered liquidator under section 40-30; or
(c) giving a registered liquidator a notice under section 40-40 (a show-cause notice); or
(d) imposing a condition on a registered liquidator under another provision of this Schedule; and
wholly or partly on the basis of information or a copy of a document included with the industry notice, merely because ASIC has given a notice under subsection (3) in relation to the matters raised by the industry notice.

Notice to industry body if ASIC takes action
(6) If ASIC does take action of the kind mentioned in subsection (5) wholly or partly on the basis of information or a copy of a document included with the industry notice, ASIC must give the industry body notice of that fact.

Notices are not legislative instruments
(7) A notice under subsection (3) or (6) is not a legislative instrument.

No liability for notice given in good faith etc.

(1) An industry body is not liable civilly, criminally or under any administrative process for giving a notice under subsection 40-100(1) if:
(a) the body acted in good faith in giving the notice; and
(b) the suspicion that is the subject of the notice is a reasonable suspicion.

(2) A person who, in good faith, makes a decision as a result of which the industry body gives a notice under subsection 40-100(1) is not liable civilly, criminally or under any administrative process for making the decision.

(3) A person who, in good faith, gives information or a document to an industry body that is included, or a copy of which is included, in a notice under subsection 40-100(1) is not liable civilly, criminally or under any administrative process for giving the information or document.

Insolvency Law Reform Bill 2014 Exposure Draft,
Insolvency Practice Schedule (Corporations),
sections 40-100 and 40-105,
pages 186 & 187
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Oct 222014
 

” Working at the coal face of insolvency and restructuring, our members have a unique view of the effectiveness of our legislative framework in restoring the economic value of underperforming businesses. For the optimum operation of markets, it’s vital that their expertise is utilised to ensure our legislative framework is the best that it can be.”

This statement from the Australian Restructuring Insolvency and Turnaround Association (ARITA) – the professional body to which most insolvency practitioners belong – accompanies publication (14-10-2014) of its discussion paper on dealing with corporate financial distress in Australia.

ARITA says that its discussion paper – “A Platform for Recovery” – identifies seven current issues in the insolvency regime and proposes law and practice reforms to remedy them.  The paper’s Executive Summary is as follows:

ARITA executive summary

The following are further statements made by ARITA on the launch its plans:

“As Australia’s insolvency and recovery professional body, we must have a clear and well-articulated policy position across the full gambit of issues that we cover, that all key stakeholders are aware of.  Our new discussion paper … identifies seven current issues in the insolvency regime and proposes law and practice reforms to remedy them.  The discussion paper does not go into the detail of specific legislative change, but concentrates on concepts and their merits …. The goal of the discussion paper is to stimulate active and informed discussion of the issues that are raised. This will inform ARITA’s final policy position …. A foundation of our thinking is that the current “one size fits all” approach to dealing with companies in financial distress is flawed.”

A copy of  A Platform for Recovery may be viewed and obtained at this location on the ARITA website.

ARITA is inviting contributions to the debate. To go to their discussion forum, go to ….   www.arita-forums.com.au

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Sep 032014
 

The Australian Restructuring Insolvency and Turnaround Association (ARITA) has released its second-round submission (26/8/2014) to the government’s Financial System Inquiry (FSI). ARITA has more than 2,200 members practising in, or interested in, the insolvency and restructuring industry. It’s full 32 page submission can be seen HERE. The Executive Summary from the submission appears below:

ARITA submission Part 1

ARITA-exec-summary-part2

ARITA-exec-summary-part3

 

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Jul 212014
 

 

In a recent decision concerning liquidators of the Walton Construction group, Justice Robertson of the Full Court of the Australian Federal Court has determined that it would be inappropriate and against the law to take into account the insolvency practitioners’ Code of Professional Conduct.

In Australian Securities and Investments Commission v Franklin (liquidator), in the matter of Walton Constructions Pty Ltd [2014] FCAFC 85 (judgment 18 July 2014), His Honour said:

“I should add that I do not regard the Insolvency Practitioners Association of Australia’s guide entitled Code of Professional Practice for Insolvency Practitioners, on which ASIC relied, as extrinsic material appropriate or permitted to be taken into account in construing ss 60 and 436DA of the Corporations Act. To my mind, the general law would not permit that guide to be taken into account in construing those provisions and that guide is outside the scope of s 15AB of the Acts Interpretation Act 1901 (Cth). For example, the relevant parts of that guide were not reproduced or referred to in the explanatory memorandum to the Corporations Amendment (Insolvency) Bill 2007 (Cth). ”           (Judgment paragraph 38.)

what-how-when-why

Conflict of interest

At the heart of the main decision in this case is the issue of conflict of interest and duty. I will analyse this part of the decision in a separate post. But here I want to discuss issues concerning compliance with and enforcement of the association’s Code of Professional Conduct.

An interesting predicament for ARITA

Justice Robertson’s comments are likely to cause something of a predicament for the association of insolvency practitioners, the Australian Restructuring Insolvency and Turnaround Association (ARITA). Naturally its Code of Professional Conduct (the Code) is binding on its members. So, it will probably review and amend this particular rule to bring it into line with the comments by Justice Robertson. Otherwise it would be imposing a requirement that the law does not acknowledge.

But, theoretically, it is not essential that ARITA bring its rules into line. If it thinks it necessary to have ethical rules that impose on its members duties greater than those imposed by the insolvency laws, it is entitled to do so. And it is entitled to take disciplinary action against members who breach such rules. Any member who doesn’t want to be bound by these extra duties can choose to resign from the association.

However it appears that enforcement of those rules by ARITA would be problematic. At the moment ARITA appears to enforce its rules only after a law enforcement agency (e.g. the Australian Securities and Investments Commission and the Companies Auditors and Liquidators Disciplinary Board) has made an unfavourable decision.

Apart from ARITA’s Code containing guidance as to what is meant by sections 60 and 436DA of the Corporations Act, ARITA has rules that impose greater duties and obligations than those imposed by the law. In constructing these extra duties and rules ARITA hopes that the courts will recognise them as a proper standard for judging the behaviour of insolvency practitioners and, by doing so, raise the standard of practice in the profession.

Until the comments by Justice Robertson in the Walton Constructions appeal case, it was widely believed that the statements and rules in ARITA’s Code applied not only to members of the association but effectively applied to all liquidators, because the courts would look to the Code when assessing whether the behaviour of a liquidator complied with his or her duties.

ARITA could suffer financially if this belief, based as it is on previous judgments by the courts, has been thrown into doubt by Justice Robertson. ARITA says that around 83% of all registered insolvency practitioners in Australia are ARITA members. But if its Code continues to impose standards that are more onerous than those imposed by the Corporations Act, and if the courts don’t continue to support its Code, more practitioners may choose not to join ARITA.

Comment by ARITA

Writing on behalf of the authors of the Code – the Australian Restructuring Insolvency & Turnaround Association (ARITA) – Michael Murray, Legal Director of ARITA,  says:

“Interestingly, Justice Robertson said that he did not regard the ARITA Code of Professional Practice for Insolvency Practitioners, on which ASIC relied, as extrinsic material appropriate or permitted to be taken into account in construing ss 60 and 436DA of the Corporations Act. This was the case as a matter of law under the Acts Interpretation Act 1901 (Cth).  As a matter of interpretation of the sections that comment is no doubt correct.  But it continues to be the case that the Code is relied upon by the courts in assessing standards of practitioners’ conduct: Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board [2006] FCA 1438.”


END OF POST

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Jul 172014
 

Is there evidence that Australia’s external administration regime causes otherwise viable businesses to fail and, if so, what could be done to address this?

This is the question being asked about external administrations in the Interim Report of the Financial System Inquiry (FSI) (July 2014). The FSI says it would value views on the costs, benefits and trade-offs of the following policy options or other alternatives:

  • No change to current arrangements.
  • Implement the 2012 proposals to reduce the complexity and cost of external administration for SMEs. [See below for details of these proposals.]

The brief section of the FSI’s report dealing with external administration may be viewed HERE.  (The full report in pdf format is available HERE.)

David Murray

David Murray, FSI chairman. Artwork from bluenotes.anz.com

US Chapter 11 regime?

Adoption by Australia of a US Chapter 11 style form of external administration could still be an option, although the FSI has already given it the thumbs down, as this extract from its interim report shows:

“The Inquiry considers adopting such a regime would be costly and could leave control in the hands of those who are often the cause of a company’s financial distress. Capital would be maintained in a business that is likely to fail, which would restrict or defer the capital from being channelled to more viable and productive enterprises. Adopting such a regime would also create more uncertainty for creditors by limiting their rights. The Inquiry notes that Chapter 11 has rarely enabled businesses to continue as going concerns in the long term. There is little empirical evidence that Australia’s voluntary administration process is causing otherwise viable businesses to fail. The Inquiry would like stakeholders to provide any empirical evidence that supports that view.”

Second round of submissions to FSI

Submissions in response to the Interim Report are due by 26 August 2014. Submissions can be lodged online using the Financial System Inquiry special facility,  or may be lodged by email or post: fsi@fsi.gov.au or Financial System Inquiry,  GPO Box 89,  Sydney NSW 2001.

Insolvency reform proposals of 2012

The 2012 insolvency reform proposals to which the FSI specifically refers in its request for second round submissions concern:

  1. Registration and discipline of insolvency practitioners (See note 1 at end of post for more information).
  2. Specific rules relating to external administrations (note 2).
  3. Regulator powers and miscellaneous amendments (note 3).

The Explanatory Material issued with the Insolvency Law Reform Bill  on 19 December 2012 can be viewed HERE.

“Thought leadership”

The Australian Restructuring Insolvency & Turnaround Association (ARITA) (previously known as the Insolvency Practitioners Association) says it has embarked on “a major project to drive thought leadership around our insolvency regime”.  It is asking insolvency practitioners who want to make a submission to FSI to work with the professional association:

“ARITA has embarked on a major project to drive thought leadership around our insolvency regime.  Along with some of ARITA’s excellent previous work, significant new work has already been completed and ARITA members will soon be asked for comment on key aspects of our policy positions. This work is, obviously, well timed to support the FSI request for submissions. ARITA will actively work to represent the views of its membership and the profession to the FSI. We would urge all members and their firms to work with ARITA on providing strong and consistent representation to the FSI. If you or your firm is looking at making its own submission, please let ARITA know so that we can collaborate with you.”  ARITA Press Release 15/7/2014



NOTES re Proposals in December 2012 Insolvency Reform Bill:

Note 1: Registration and discipline of insolvency practitioners

Common rules regarding:   the physical registers of insolvency practitioners;  registration and disciplinary Committees.

Note 2: Specific rules relating to external administrations

Common rules regarding: •

  • Remuneration and other benefits received by the insolvency  practitioner;
  • The handling of administration or estate funds;
  • The provision of information by insolvency practitioners during an external administration or bankruptcy;
  • The meetings of creditors during an external administration or bankruptcy;
  • Committee of inspection formed as part of an external administration or bankruptcy; and
  • The external review of the administration of an estate or insolvency.

Note 3, part (a): Regulator powers and miscellaneous amendments

Provide ASIC with further powers to assist it in its oversight of the regulation of registered liquidators. In particular, the Bill amends the ASIC Act to:

  • enable ASIC to require the provision of information and books as part of an ASIC proactive surveillance program;
  • enable ASIC to provide administration information to a person with a material interest in the information; and
  • improve the transparency of ASIC oversight of the corporate insolvency industry.

Note 3, part (b): Regulator powers and miscellaneous amendments

Amend the Bankruptcy Act to enable ITSA to provide information relevant to the administration of the corporate law to ASIC.

Note 3, part (c): Regulator powers and miscellaneous amendments

A range of miscellaneous amendments, including:

  • amending the Acts to strengthen the penalties for breach of a bankrupt’s or directors’ obligations to provide a report as to affairs (RATA), or the books of the company, to an insolvency practitioner;
  • amend the Corporations Act to provide a process for the automatic disqualification of directors that have failed to provide a RATA, or the books of the company, to a registered liquidator until they have complied with those obligations; and
  • amend the Acts to enable the assignment of an insolvency practitioner’s statutory rights of actions.

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