Letter/Communication
Submission to Parliamentary Joint Committee on Corporations and Financial Services inquiry into "Corporate Insolvency in Australia"
30/11/2022
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Abstract
This was a researched submission to an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services into "Corporate Insolvency in Australia", the terms of reference for which (agreed 28/9/22) were to inquire "into the effectiveness of Australia's corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy".
The submission addressed priority matters for law reform in corporate insolvency, principally (i) legislative improvements and remedial amendments and (ii) analysing and suggesting what might be done regarding the typically low (negligible) returns to unsecured creditors in company liquidations (due to the present ineffectiveness of the insolvent trading regime as a deterrent, as established by recent ASIC statistics).
This researched submission and subsequent testimony as a witness (invited to provide evidence to the inquiry in its public hearings) were cited 50 times throughout the 'Final Report of Parliamentary Joint Committee on Corporations and Financial Services "Corporate Insolvency in Australia"', July 2023, accessible at https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/CorporateInsolvency/Report.
In particular, the substance of my submission (and subsequent testimony to the inquiry's public hearings) ultimately informed and supported Recommendation 20 in the PJC Report "that the comprehensive review [recommended into corporate insolvency laws] examine the operation of the insolvent trading regime and its impact on the broader corporate insolvency framework." The substance of my submission in this regard was endorsed in the PJC's Final Report at [10.52] and [10.53]; the PJC Report noted its concern that (as established in my submission) "the current insolvent trading regime is not working effectively to prevent companies from becoming deeply insolvent before they enter formal insolvency or restructuring pathways", that "deeply insolvent trading distorts other parts of the insolvency system" and that "one of the top priorities for the proposed comprehensive review should be to address the ineffectiveness of the insolvent trading regime, its enforcement, and the distorting impacts on other parts of the insolvency system."
Details
- Title
- Submission to Parliamentary Joint Committee on Corporations and Financial Services inquiry into "Corporate Insolvency in Australia"
- Creators
- Mark N Wellard (Author) - University of Technology Sydney
- Identifiers
- 991013241361402368
- Academic Unit
- Faculty of Business, Law and Arts
- Resource Type
- Letter/Communication