Insolvency Law Review Update - 27 September 2007
[ Last Updated 27 September 2007 ]
The Insolvency Act 2006, Companies Amendment Act 2006 and Insolvency (Cross-Border) Act 2006) were enacted by Parliament in November 2006.
The Insolvency Act 2006 streamlines the personal bankruptcy process and introduces a new No-Asset Procedure for individuals who are in financial distress. The Companies Amendment Act 2006 adopts the Australian voluntary administration regime and makes some minor amendments to the corporate insolvency provisions in the Companies Act 1993.
On 9 July 2007, Cabinet agreed to draft the necessary regulations to bring into effect the Insolvency Act 2006 and the Companies Amendment Act 2006. The Cabinet paper detailing the content of these regulations is available on this website.
Cabinet agreed on 24 September 2007 that the Companies Amendment Act 2006 will come into effect on 1 November 2007. The Companies Amendment Act 2006 makes some amendments to the corporate insolvency provisions in the Companies Act 1993. Most significantly, it introduces the new business rehabilitation scheme along the lines of the Australian voluntary administration regime. The new voluntary administration regime provides an alternative to liquidation for companies in financial distress. The Companies Amendment Act 2006 was enacted by Parliament late last year following a review of the personal and corporate insolvency laws.
The Companies Amendment Act 2006 also introduces provisions dealing with the appointment of liquidators, voidable transactions, the use of phoenix companies, and makes some technical changes to increase the accountability of liquidators to creditors.
It is anticipated that the new Insolvency Act 2006, which deals with personal insolvency matters, will come into effect on 3 December 2007. The Insolvency Act 2006 will repeal and replace the Insolvency Act 1967. Further updates on this will be provided on this website and in future editions of the MED Newsletter.
The Insolvency (Cross-Border) Act 2006 will not come into effect until Australia adopts the UNCITRAL Model Law on cross-border insolvency in its insolvency legislation.
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