2. Introduction
1. The Ministry of Economic Development requested that the Law Commission provide an advisory report on:
- The role of the state in insolvency law;
- Whether additional provisions should be inserted into New Zealand law to deal with business rehabilitation or reorganization;
- Whether statutory management under the Corporations (Investigation and Management) Act 1989 should be retained in its existing or some modified form; and
- Whether it is desirable for New Zealand to enact a single statute to deal with insolvency law issues.
The advice from the Law Commission has been released for consultation as an advisory report entitled "Insolvency Law Reform: Promoting Trust and Confidence".
2. Charles River Associates have been asked to provide a review of the Law Commission Report, focusing particularly on the recommendations that New Zealand:
- Establish a regime for the regulation and licensing of insolvency practitioners;
- Introduce a moratorium on creditors of insolvent companies that would allow the operation of a targeted business rehabilitation regime; and
- Establish a new office of the Inspector General of Insolvency.
We first consider the significance and role of the insolvency regime in the economy and provide an overall assessment of the approach and evidence adduced by the Law Commission in support of their recommendations before providing a detailed analysis of each of these recommendations.
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