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SME Debt Restructuring Legislation Passed

By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.

The Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 has been passed in the Senate as of yesterday. The legislation will take effect from 1 January 2021.

The centrepiece of the legislation is the introduction of a new restructuring mechanism for SME’s, called ‘Debt Restructuring’. The process allows insolvent SME’s to put forward a proposal to creditors to resolve unsecured debts and allow the company to continue trading. The process is similar to Part IX debt agreements available to insolvent individuals under the bankruptcy legislation. [...]  READ MORE →

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Model Behaviour: the Australian version of America’s Chapter 11 Bankruptcy Scheme – Trustees & Creditors

By Jodie Rodrigues, solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

On 24 September 2020, the latest instalment in Australia’s insolvency reforms was announced. These reforms have been branded “the most significant reforms to Australia’s insolvency framework in 30 years”.

For information about the proposed insolvency regulations, read Part 1 of this blog here.

 The proposed scheme has been developed to provide relief to small business in light of the economic impact of the coronavirus by way of the additional debt taken on to survive. However, the impact of the proposed mechanisms is wide reaching, and particularly in circumstances where no draft legislation has been released, no consultation has been undertaken, and the plan is to have these amendments in place by 1 January 2021, the reforms may be hazardous for creditors and insolvency practitioners. Read on to find how the insolvency reform will affect you.
 [...]  READ MORE →