Reforms from 1 March 2017 for Corporate Insolvencies
Below is a summary of changes that will come into effect from 1 March 2017:
- The term “Official Liquidator” will be removed. These were Liquidators that could accept appointments by the Court.
- All Liquidators will be referred to “Registered Liquidators”.
- A notice for Non Exercise of a Rights by an Administrator to a landlord will only need to list an address for the property.
- A new provision requires a director to inform the Deed Administrator of a material contravention of the terms of a Deed and the Deed Administrator needs to inform creditors of the contravention.
- A Liquidator will be appointed by the court if it declares a deed of company arrangement to be terminated.
- An insolvency practitioner administering a corporate insolvency can ask the court for dispensation from setting out the company’s former name on public documents or negotiable instruments.
- The definition of the relation back period is amended so that it commences from the date a winding up application is filed even for voluntary administrations. This will stop the situation where a director appoints an Administrator after a winding up application is filed to reduce the period that voidable transactions could be pursued as opposed to the longer period that such transactions could have been pursued if court liquidation proceeded.
- The smaller preference claims against the Australian Taxation Office can be pursued by lower courts.
- An insolvency practitioner administering a corporate appointment will required to lodge the Declaration of Independence and Relevant Relationships (DIRRI) and any replacement DIRRI with ASIC.
- An insolvency practitioner will have the ability to assign a right to sue under the Corporations Act 2001, which includes preferences and other voidable transactions. Before an assignment is made, creditors must be given notice of it.
Peter Dinoris
Artemis Insolvency
m 0436 409 739
