Aug 132017
 

In a recent judgment in the Federal Court the judge, the Honourable David John O’Callaghan, discusses the part that ARITA’s code of professional conduct plays in determining questions concerning the independence and impartiality of an external administrator’s conduct.

What His Honour said – extracts:

There is no doubt that the code is a useful document in assisting practitioners; …. it is “a useful guide to the common practice in such matters, and to the profession’s own view of proper professional standards”; …. it is “… permissible for the Court to take [it] into account, to that extent, in applying the law concerning independence and impartiality to the insolvency practitioner’s conduct in the case before it”; …. On the other hand, the code “has no legal status”; …. Any question relating to the appearance of impartiality must be determined according to law. It is not the Court’s function in a case such as this to either apply or interpret the code.

For more, see his complete comments below.


 

Judge OCallaghan

The Hon David John O’Callaghan

Judgment published 11 August 2017 … In Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 914

….

The code of professional practice

92. I should also say something briefly about the Code of Professional Practice of The Australian Restructuring Insolvency and Turnaround Association (ARITA) (the code), because the administrators sought to rely on the code as providing an independent basis upon which they might be permitted to continue to act as administrators. In particular, submissions were made on behalf of the administrators about those parts of the code which define “exceptions” to the “rule” that, relevantly, practitioners must not take an appointment if they have had a professional relationship with the insolvent company during the previous two years: see section 6.8 of the third edition of the code.

93.  There is no doubt that the code is a useful document in assisting practitioners, including with respect to questions of whether, in accepting or retaining an appointment as an administrator, the practitioner is, and is seen to be, independent: see chapter 6 of the third edition of the code. The code is intended to provide guidance on standards of practice and professional conduct expected of ARITA members.

94.  In Bovis Lend Lease Pty Ltd v Wily [2003] NSWSC 467; 45 ACSR 612, Austin J described (at [163]) the Code of Professional Conduct published by the Insolvency Practitioners Association of Australia (as ARITA was previously known) as “a useful guide to the common practice in such matters, and to the profession’s own view of proper professional standards”. Accordingly, his Honour held that “[i]t is permissible for the Court to take [it] into account, to that extent, in applying the law concerning independence and impartiality to the insolvency practitioner’s conduct in the case before it”: see Bovis Lend Lease Pty Ltd v Wily [2003] NSWSC 467; 45 ACSR 612 at [163]; comparing National Roads and Motorists’ Association Ltd v Geeson [2001] NSWSC 832; 39 ACSR 401 at 403 and Permanent Trustee Australia Ltd v Boulton & Lynjoe Pty Ltd (1994) 33 NSWLR 735 at 738.

95.  On the other hand, the code “has no legal status”, as Sanderson M stated in Monarch Gold Mining Co Ltd; Ex parte Hughes [2008] WASC 201. Relevantly, Sanderson M observed in that case, “a failure to comply with the terms of the code would not render a practitioner liable for prosecution under the Corporations Act or any other statute … Nor does a failure to comply with the provisions of the code mean that there has been a failure to comply with what is required in the DIRRI”: see Re Monarch Gold Mining Co Ltd; Ex parte Hughes [2008] WASC 201 at [37].

96.  Any question relating to the appearance of impartiality must be determined according to law. It is not the Court’s function in a case such as this to either apply or interpret the code.


 

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Jun 292017
 

In reporting on the results of an investigation into the conduct of a Victorian registered liquidator operating as a sole practitioner, the Australian Securities and Investments Commission (ASIC) has provided a list of procedures which the liquidator failed to carry out.  

The catalogue serves both as a guide to some of the duties that ASIC regards as important, and as a reminder to liquidators.

ASIC logo

Extract from ASIC Media Release 28 June 2017

ASIC’s concerns centred on alleged failures to:

  • conduct pre-appointment independence reviews;
  • send to third parties adequate ‘Day One’ correspondence;
  • properly investigate company affairs;
  • take steps to protect and secure assets in a timely manner;
  • adequately investigate potential illegal phoenix activities and taxation offences of directors and their advisors;
  • make sufficient requests of company officers for books and records;
  • seek prompt assistance from ASIC under the Liquidator Assistance program where the company director or accountant failed to provide adequate books and records;
  • undertake adequate review of voidable transactions, including unfair preferences and uncommercial transactions;
  • lodge complete reports with ASIC;
  • provide creditors with adequate reporting to enable informed assessment of remuneration requests and may have drawn remuneration he was not entitled to; and
  • comply with legal requirements to document work undertaken.

Not each and every one of ASIC’s concerns were found in all of the external administrations reviewed.

ASIC Commissioner John Price said, ‘ASIC continues its focus on registered liquidators who fail to carry out their legal obligations to carry out adequate investigations and report fully to creditors, including in circumstances suggesting pre-appointment illegal activity.

‘Creditors have every right to expect registered liquidators to act independently and competently – especially given their role as a fiduciary. The community needs to have trust and confidence in the administration of insolvent companies.

‘ASIC will continue to review and take action against liquidators whom ASIC believes fall short of meeting legal and professional standards.’

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 Corporate Insolvency Laws commencing 1 March 2017

 ASIC, Corporate Insolvency, Insolvency practices, Regulation, Standards  Comments Off on New Corporate Insolvency Laws commencing 1 March 2017
Mar 072017
 

Commencing on 1 March 2017 are some of the changes to Australia’s corporate insolvency legislation that were approved when the Insolvency Law Reform Act was passed in 2016. The Australian Securities and Investments Commission (ASIC), the regulator of the Corporations Act, has issued a table listing and summarizing what it says are the key changes. Set out below is a copy of that table. (The original is available to view at ASIC).

For a convenient list of NEW ASIC FORMS and AMENDED ASIC FORMS go to this EMAIL extract from ASIC to registered liquidators on 6 March 2017. NOTE: Some of the new and amended forms have not yet been released by ASIC (7/3/2017).

………………………………….

Corporate Insolvency Law Reform – key changes effective from 1 March 2017

Subjects

  1. Registration Process
  2. Industry wide conditions
  3. Applying to vary or remove a condition or to lift or shorten a suspension
  4. Renewal of registration
  5. The Liquidator Register
  6. Insurance
  7. Annual liquidator return
  8. Notice of significant, and other, events
  9. ASIC power to direct registered liquidator to lodge documents or give information or correct inaccuracies
  10. ASIC power to cancel or suspend a person’s registration
  11. Disciplinary action by a committee
  12. Notice by industry body of possible grounds for disciplinary action
  13. Court oversight of registered liquidators
  14. Registration and disciplinary committees
  15. Administrator’s notice to owner or lessor of property
  16. Notice – material contravention of deed of company arrangement
  17. Company’s former name
  18. Relation back day
  19. Lodging declarations of relevant relationships and indemnities
  20. Lodgement requirements relating to pooled groups


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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Australian Bankruptcy Laws commencing 1 March 2017

 Insolvency Law, Insolvency practices, Personal Bankruptcy, Regulation  Comments Off on Australian Bankruptcy Laws commencing 1 March 2017
Feb 172017
 

Some of the changes to the Australia’s bankruptcy legislation approved when the Insolvency Law Reform Act was passed in 2016 will commence on 1 March 2017. The Australian Financial Security Authority (AFSA), the regulator of the Bankruptcy Act, has issued a table listing those changes and comparing them with the existing provisions. Set out below is a copy of that table. (The original is available for download from AFSA.)

————————————————————————————

Comparative Table (Bankruptcy tranche 1 – commencement date 1 March 2017) re Insolvency Law Reform Act.

Table comparing the provisions of the Insolvency Practice Schedule (Bankruptcy) that are to commence on 1 March 2017 with existing provisions of the Bankruptcy Act

Schedule provision
Current Bankruptcy Act provision
Comment

10-5: Inspector-General (IG) must work cooperatively with Australian Securities and Investment Commission (ASIC) in performing functions and exercising powers

No equivalent

Requirement for the IG to work cooperatively with ASIC applies in relation to persons who are, have been or may become both registered trustees under the Bankruptcy Act and registered liquidators under the Corporations Act.

15-1: IG must establish a register of trustees

No direct equivalent

– some trustee information is currently entered on the National Personal Insolvency Index (NPII)

The register will contain information relating to the trustee’s registration, as well as contact details and certain disciplinary action taken against trustees. The information on the register will be publicly available.

20-5: Application to IG for registration as a trustee

154A

An application must be in the approved form and accompanied by the application fee.

20-10: IG may convene committee to consider registration application

155

The committee to consist of the IG; a registered trustee chosen by a prescribed body; and a person appointed by the Minister. The ‘prescribed body’ is the Australian Restructuring Insolvency & Turnaround Association (ARITA).

20-15: IG must refer applications to the committee

No equivalent – 155 assumes referral of applications

The IG must refer an application within two months of receiving it.

20-20: Committee to consider applications

155A

The committee must decide within 45 business days of interviewing an applicant whether he/she should be registered.

20-25: Committee to report

155A(6)

A report must be given to the applicant and the IG.

20-30: Registration as a trustee

155B and 155C

The IG must register an applicant if the committee recommends it and if the applicant has produced evidence in writing that he/she has taken out adequate and appropriate professional indemnity and fidelity insurance, and has paid the registration fee. Registration has effect for three years, and the IG must give the trustee a certificate of registration (may be given electronically).

20-35: Insolvency Practice Rules (IPRs)4 may impose conditions on all registered trustees or on specified class of trustee

No equivalent

Provides for imposition of industry-wide conditions, or conditions limiting the kinds of activity in which a trustee may engage.

Conditions include undertaking at least 40 hours of continuing professional education each year (10 hours of which must be capable of being objectively verified by an competent source) and maintaining adequate professional indemnity and fidelity insurance during any period of suspension of registration in relation to work carried out prior to the suspension taking effect. (see IPR 20-5)

20-40: Application to IG to vary or remove condition on registration

155E(1) to (3)

An application must be made in the approved form, but cannot be made if the trustee’s registration is suspended; if the condition is of a prescribed kind; or in prescribed circumstances.

20-45: IG may convene committee to consider application to vary or remove condition

155E(4) & (5)

The committee to consist of the IG; a registered trustee chosen by a prescribed body, and a person appointed by the Minister. The ‘prescribed body’ is ARITA.

20-50: IG must refer application to the committee

No equivalent – 155E assumes referral of applications

The IG must refer an application within two months of receiving it.

20-55: Committee to consider application

155E(6) & 155F(1)

The committee must interview an applicant unless the applicant agrees otherwise, and within 20 business days thereafter decide whether the condition should be varied or removed.

20-60: Committee to report

155F(2)

A report is to be given to the applicant and the IG.

20-65: Committee’s decision given effect

155F(4)

If the committee recommends removal or variation of condition, the condition is removed or varied in accordance with the decision.

20-70: Application for renewal of registration

155D(2) & (3)

Applications for renewal under 20-70 must be made in the approved form.

20-75: Renewal

155D(1)

The IG shall give a trustee a certificate of registration upon renewal.

20-80: False representation that a person is a registered trustee

No equivalent

A new offence that carries a maximum penalty of 30 penalty units (1 penalty unit = $180).

25-1: Registered trustees to maintain adequate insurance

No equivalent, however undertaking to maintain adequate insurance is a requirement for registration  and failure to do so can be grounds for the IG to issue a ‘show cause’ notice

New offences introduced for failing to maintain adequate professional indemnity and fidelity insurance. Maximum penalty of 1,000 penalty units (for false or reckless failure); or 60 penalty units (for failure in other circumstances – e.g. inadvertent failure). The IG may, by legislative instrument, determine what constitutes adequate insurance.

•  No legislative instrument is currently proposed. Requirements relating to insurance will be outlined in Inspector-General Practice Statement (IGPS) 13

30-1: Annual trustee return

No equivalent

A new requirement for trustees to lodge annual return in the approved form, including evidence that adequate insurance has been maintained. The return must be lodged annually within one month of the anniversary of the date of a trustee’s registration. Maximum penalty for failure to lodge, 5 penalty units.

35-1: Notice of significant events to IG

161A

Introduction of new notifiable events that include:

•  being issued with a bankruptcy notice

•  disqualification from managing a corporation

•  ceasing to have adequate insurance

•  being issued a ‘show cause’ notice in relation to registration as a liquidator, or having registration as a liquidator suspended or cancelled.

The notice must be filed in the approved form within five business days after the trustee could reasonably be expected to be aware that the event has occurred. Maximum penalty for failure to notify is 100 penalty units.

35-5: Notification of other events to IG

No equivalent

Introduction of an obligation to notify in the approved form if information in the annual trustee return or annual administration return is, or becomes, inaccurate in a material particular, and any other events prescribed (in the IPRs). The notice must be lodged within 10 business days after the trustee could reasonably be expected to be aware that the event has occurred. Maximum penalty for failure to notify is 5 penalty units.

40-5: Registered trustee to remedy failure to lodge documents or give

information or documents

No equivalent

The IG may direct a trustee in writing to comply with the requirement to lodge any document or give any information or document required to be given to a person under the Act or to be lodged with the IG. If a trustee fails to comply, the IG can direct the trustee not to accept further appointments and/or apply to the court for an order for compliance.

40-10: Registered trustee to correct inaccuracies etc.

No equivalent

If the IG suspects information provided by a trustee is incomplete or incorrect, the IG can direct the trustee in writing to confirm information is complete or correct, or to provide complete or correct information and/or notify persons of the addition or correction. If a trustee fails to comply, the IG can direct the trustee not to accept further appointments and/or apply to the court for an order for compliance.

40-15: Direction not to accept further appointments

No equivalent

The IG may direct a trustee in writing not to accept further appointments if:

•  the trustee has failed to comply with a direction under 40-5 or 40-10

•  a committee convened to consider the trustee’s ongoing registration decides the IG should give the direction

•  the trustee has failed to comply with a direction under 7070 (to give information to debtor or creditors) or

•  the trustee has failed to comply with a direction under 75-20(1) or (2) to convene a meeting of creditors

–  note 70-70 and 75-20 commence on 1 September 2017.

When given, a direction not to accept further appointments becomes a condition on the trustee’s registration.

40-20: Automatic cancellation of registration

182

Cancellation of registration occurs on the death of a trustee or if he/she becomes an insolvent under administration.

40-25: IG may suspend registration

No equivalent

The IG may suspend a registration where the trustee:

•  is disqualified from managing a corporation

•  ceases to have adequate insurance

•  has had his/her registration as a liquidator suspended or cancelled (other than on request)

•  owes more than the prescribed amount of estate charges

•  fails to comply with a court order to repay remuneration to an estate

•  has been convicted of an offence involving fraud or dishonesty or

•  requests the IG to suspend the registration.

40-30: IG may cancel registration

No direct equivalent (155G provides

a trustee may request the IG that registration cease)

The IG may cancel a registration where a trustee requests it, or in circumstances equivalent to those mentioned in relation to the suspension of a registration under 40-25 (except registration as a liquidator must be cancelled, not merely suspended).

40-35: Notice of suspension or cancellation

No equivalent

If the IG decides to suspend (under 40-25) or cancel (under 40-30) a trustee’s registration, the IG must give notice of the decision, along with reasons, to the trustee within 10 business days. The decision comes into effect the day after the notice is given. Failure to give the notice within 10 business days does not affect the validity of the decision.

40-40: IG may give a show- cause notice

155H(1)

A show-cause notice may be issued by the IG where the trustee:

•  no longer has the requisite qualifications, experience, knowledge and abilities

•  has committed an act of bankruptcy

•  is disqualified from managing a corporation

•  ceases to have adequate insurance

•  has breached a condition of registration

•  has breached a provision of the Bankruptcy Act

•  has had his/her registration as a liquidator cancelled or suspended (other than on request)

•  owes more than the prescribed amount of estate charges

•  fails to comply with a court order to repay remuneration to an estate

•  has been convicted of an offence involving fraud or dishonesty

•  is permanently or temporarily unable to perform the functions of a trustee due to physical or mental incapacity

•  fails to carry out adequately and properly the duties of a trustee

•  fails to carry out adequately and properly the duties of the administrator of a debt agreement

•  is not a fit and proper person

•  is not resident in Australia or

•  has failed to comply with a standard prescribed in the IPRs.

40-45: IG may convene a committee

155H(2) & (3)

The committee is to consist of the IG; a registered trustee chosen by a prescribed body, and a person appointed by the Minister. The ‘prescribed body’ is ARITA.

40-50: IG may refer matter to a committee

155H(2)

The IG may refer a matter to the committee if no explanation is received within 20 business days after a show-cause notice is given; or if not satisfied by the explanation.

40-55: Decision of the committee

155I(1), (2) & (3)

The committee can decide one or more of the following:

•  the trustee continue to be registered

•  the trustee’s registration be suspended or cancelled

•  the IG direct the trustee not to accept further appointments

•  the trustee be publicly admonished or reprimanded

•  a condition be imposed on the trustee’s registration

•  a condition be imposed on the registration of all other trustees that they not allow the trustee in question to exercise powers or perform functions on their behalf

•  the IG publish specified information in relation to the committee’s decision.

40-60: Committee to report

155I(4)

A report must be given to the registered trustee and the IG.

40-65: IG must give effect to committee’s  decision

155I(6)

The IG must give effect to the decision made by the committee.

40-70: Application to lift or shorten suspension

No equivalent

A trustee may lodge an application with the IG in the approved form to lift, or shorten the period of a suspension.

40-75: IG may convene a committee to consider applications

No equivalent

The committee is to consist of the IG; a registered trustee chosen by a prescribed body; and a person appointed by the Minister. The ‘prescribed body’ is ARITA.

40-80: IG must refer applications to a committee

No equivalent

The IG must refer an application within two months of receiving it.

40-85: Committee to consider applications

No equivalent

The committee must interview an applicant unless the applicant agrees otherwise, and within 10 business days thereafter, decide whether the suspension should be lifted or shortened.

40-90: Committee to report

No equivalent

A report must be given to the applicant and the IG.

40-95: Committee’s decision given effect

No equivalent

If the committee decides to lift or shorten the suspension, the suspension is lifted or shortened in accordance with that decision.

40-100: Notice by industry bodies of possible grounds for disciplinary action

No equivalent

An industry body may lodge with the IG a notice in the approved form stating that it reasonably suspects there are grounds for the IG to impose a condition on, or

suspend or cancel the registration of, a trustee, or issue a show-cause notice to the trustee. The IG must consider the information but is not bound to act on it.

40-105: No liability for notice given in good faith etc.

No equivalent

An industry body is not liable civilly, criminally or under any administrative process for a notice given in good faith and where the suspicion that is the subject of the notice is a reasonable suspicion. That protection extends to persons who give information to the industry body that is contained in a notice to the IG and to persons who make a decision as a result of which the industry body gives a notice.

40-110: Meaning of industry body

No equivalent

The IPRs may prescribe industry bodies–ARITA and the peak accounting and legal professional bodies are prescribed (see IPR 40-1).

45-1: Court oversight of registered trustees

No direct equivalent (some of the same subject matter is contained in 176 and

179. Other provisions of the ILRA also partially replicate 179

– e.g. 9015)

A Court may make such orders as it thinks fit in relation to a registered trustee, either on its own initiative, or on application by the IG or the trustee. In making orders the court may take into account:

•  whether the trustee has faithfully performed his/her duties

•  whether an action or failure to act by the trustee complies with the Act or IPRs, or the order of the court

•  whether any person has suffered, or is likely to suffer, loss or damage as a result of the trustee’s act or failure to act

•  the seriousness of the consequences of any act or failure to act by the trustee, including the effect on public confidence in registered trustees as a group.

45-5: Court may make orders about costs

No direct equivalent, but some overlap with 176

Without limiting 45-1, the Court may make orders in relation to a registered trustee that deal with the costs of a matter considered by the Court.

50-5: Prescribed body appointing a person to a committee

No equivalent

The IPRs may prescribe knowledge and experience requirements for members of a committee chosen by a prescribed body (at least 5 years’ experience as a registered trustee is prescribed – see IPR 50-15). The ‘prescribed body’ is ARITA.

50-10: Minister appointing a person to a committee

No equivalent

The Minister must be satisfied that a person is qualified by virtue of his or  her knowledge of, or experience in, one or more of: business; law; economics; accounting; public policy relating to bankruptcy.

50-15: Single committee may consider more than one matter

No equivalent

A single committee may consider one or more of the following:

•  matter(s) relating to one application for trustee registration

•  matter(s) relating to more than one applicant for registration

•  matter(s) relating to one or more registered trustees.

50-20: Ongoing consideration of matters by committee

No direct equivalent (but similar in some respects to the subject matter in Bankruptcy Regs 8.05G and 8.23)

The committee’s powers are not affected by a change in membership of the committee; the committee may adjourn consideration of a matter (and may do so more than once). A matter may be transferred to another committee.

50-25: Procedure and other rules relating to committees

No equivalent

The IPRs may provide for (see division 50 of the IPRs):

•  the manner in which committees perform their functions including:

(i) meetings (ii) quorum requirements (iii) disclosure of interests and (iv) how questions are decided

•  the reconstitution of a committee and

•  the termination of consideration of a matter by a committee and the transfer of matters to another committee.

50-30: Remuneration of committee members

No equivalent

Committee members are entitled to receive remuneration as determined by the Remuneration Tribunal. If no Tribunal Determination is in place, the members are entitled to receive such remuneration as the Minister determines in writing.

50-35: Committee must only use information etc. for purposes for which disclosed

No equivalent

A committee member commits an offence if he/she uses or discloses information or a document that was disclosed to him/her for the purposes of serving on

the committee (50 penalty unit maximum penalty). Exceptions apply where the document or information is disclosed to: ASIC; other committees under this Part or the corresponding Part of the Insolvency Practice Schedule (Corporations); prescribed bodies; authorities in States, Territories or overseas exercising similar functions to the committee or the IG; or a court or tribunal.

96-1: Review by the Administrative Appeals Tribunal (AAT)

155A(7) – registration application

155F(3) – application to vary/remove condition

155I(5) – disciplinary action by committee

The following decisions are reviewable by the AAT:

•  a committee decision under 20-20 (registration application)

•  a committee decision under 20-55 (application to vary or remove condition on registration)

•  IG decision under 40-15 (directing trustee not to accept further appointments)

•  IG decision under 40-25 (suspending registration)

•  IG decision under 40-35 (cancelling registration)

•  Committee decision under 40-55 (disciplinary action by committee)

•  Committee decision under 40-85 (application to lift or shorten a suspension).

105-1: The Insolvency Practice Rules

No equivalent

The Minister may, by legislative instrument, make rules providing for matters required or permitted by the Bankruptcy Act to be made by the Rules, or necessary or convenient to be provide for in order to carry out or give effect to the Act.

Endnote (edited)

This table deals only with provisions in Parts 1 and 2 of the Schedule (and sections 96-1 and 105-1 in Part 4, to the extent those provisions relate to Parts 1 and 2).

Transitional arrangements apply in respect of some new provisions – the transitional arrangements are not covered in this table.

This table does not present a full description of the new provisions, but highlights their main features and/or how they differ from existing.

A reference to the IPRs is a reference to the Insolvency Practice Rules, which underpin the Insolvency Practice Schedule (Bankruptcy) and provide greater detail in relation to various requirements of the Parts 1 and 2 of the IPRs commence on 1 March 2017.

————————————————————————————
End of table

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Feb 072016
 

On 6 January 2016 the ATO issued a Decision Impact Statement concerning the High Court judgment in the Australian Building Systems case.

[See my previous post for a discussion of the High Court’s majority decision: Australian Building Systems case: plenty of common sense in the dissenting judgment by Justice Michelle Gordon]

It seems that although the ATO accepts the High Court’s majority decision (as, of course, it must), it’s interpretation of the decision is nuanced, and suggests that it has no intention of giving up on the retention obligation.

Continue reading »

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Feb 022016
 

On 3 December 2015 the Insolvency Law Reform Bill 2015 was introduced into Australia’s House of Representatives. The Bill is a newer version of the 2014 draft Bill (Insolvency Law Reform Bill 2014), which was released in November 2014.

Ministerial Summary of the Insolvency Law Reform Bill 2015

The Bill was introduced to Parliament with this speech by Mr Alex Hawke, Assistant Minister to the Treasurer. The following is a copy of his speech. I have added headings to improve readability.
Continue reading »

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Aug 132015
 

What reasons are given for the failure and insolvency of non-corporate businesses, i.e., those owned by individuals as sole traders or in partnership? Is there any alignment between the reasons given for non-corporate business failures and the reasons given for corporate failures? And where a non-corporate (aka personal) business  insolvency has been brought about by the phoenix scheme of a corporate customer or client, is this made known to the regulator for statistical purposes?

This article is an extension of the discussion in my post  “Confusing causes of corporate insolvency”. Continue reading »

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Creditors’ voluntary winding up – fundamentals – flowchart

 Checklists and guides, Corporate Insolvency, Insolvency Law, Insolvency practices  Comments Off on Creditors’ voluntary winding up – fundamentals – flowchart
Jun 242015
 

(24 June 2015: copyright P J Keenan)


OVERVIEW OF  Creditors’ Voluntary Winding up IN AUSTRALIA

Resolutions by shareholders to wind up the company and to appoint a liquidator
Liquidator takes control of business, property and affairs
Liquidator prepares report of proposed remuneration
Liquidator makes declarations of indemnities, up-front payments and relevant relationships
Directors’ statement about business, property, affairs and financial circumstances of company (Report as to Affairs)
Meeting of creditors (possible committee of inspection; fix remuneration of liquidator; confirm or change liquidator; etc.)
Investigations, realisations of assets and unpaid share capital, recovery of property and (possibly) recovery of compensation Liquidator’s statutory reporting, accounts and returns
Examination and determination of creditors claims Payment of expenses and liquidator’s remuneration
Distribution of residual funds to creditors Annual meeting of creditors or annual report
Final meeting of creditors and shareholders
Deregistration of the company

LAW: Corporations Act 2001, Chapter 5; Corporations Regulations 2001.
PRACTICE STANDARDS: The Third Edition of the Code of Professional Practice of the Australian Restructuring Insolvency & Turnaround Association

 


 

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