3. Objectives
The objectives set by the Government for the review are to:
- provide a predictable and simple regime for financial failure that can be administered quickly and efficiently, imposes the minimum necessary compliance and regulatory costs on its users, and does not stifle innovation, responsible risk taking and entrepreneurialism by excessively penalising business failure;
- distribute the proceeds to creditors in accordance with their relative pre-insolvency entitlements, unless it can be shown that the public interest in providing greater protection to one or more creditors (statutory preferences) outweighs the economic and social costs of any such preference;
- maximise the returns to creditors by providing flexible and effective methods of insolvency administration and enforcement which encourage early intervention when financial distress becomes apparent;
- enable individuals in bankruptcy again to participate fully in the economic life of the community by discharging them from their remaining debts in appropriate circumstances; and
- promote international co-operation in relation to cross-border insolvency.
These objectives are diverse, and there are tensions between some of them. The Ministry seeks information from stakeholders on both the Commission's specific recommendations and the wider issues that are relevant, given the Government's objectives in reviewing insolvency law.
When responding to the following questions the Ministry requests that you provide explanations with your answers. To provide some guidance on the information sought, explanations that relate to costs and benefits, evidence or examples, and alternative perspectives on the issues raised would aid policy development on these issues.
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