On 28 March 2017, the Australian Federal Government released draft legislation in relation to two reforms to Australia’s insolvency law regime: the introduction of an insolvent trading safe harbour, and the operation of ipso facto restrictions.
We previously released an article summarising the reforms, and outlining some issues we thought still needed to be resolved. Herbert Smith Freehills also made a submission to Treasury regarding the reforms on 24 April 2017 as part of the Government’s public consultation process which has now come to an end.
In our submission we welcome the introduction of the legislation which allows for greater flexibility in restructuring and encourages corporate rescue. Our submission includes specific comments about the uncertainties and issues that arise in relation to the proposed reforms. We further make a number of recommendations regarding the ways in which the proposed insolvent trading safe harbour and ipso facto restrictions could be improved.
Click on the download link above to access the Herbert Smith Freehills submission in response to the draft legislation.
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2020