Draft Insolvency Law Reform Bill
The Ministry has prepared a draft Insolvency Law Reform Bill and accompanying discussion document for consultation. The discussion document also seeks views on the regulation of liquidators and administrators, and the treatment of entitlements to wages in lieu of notice.
The draft Bill is the product of the various streams of work that have formed the insolvency law review. The Ministry has previously consulted the public on a wide range of topics including bankruptcy administration, voidable transactions, priority debts, cross border insolvency, business rehabilitation, statutory management and the role of the State in insolvency. The Government's policy decisions on these topics are noted in the Discussion Document.
The purpose of consulting on the draft Bill is not to repeat or re-open the policy development process. Rather, it is an acknowledgement that the detail of insolvency legislation can have important implications for both insolvency professionals and the insolvent individuals and companies that they work with. We recognise that many people who work in the insolvency industry have a wealth of knowledge and experience that they have developed in the course of applying the current law. We hope to draw on that knowledge and experience so that the practical effects of changes to the legislation can be identified. This consultation exercise is also intended to help ensure that the legislation gives proper effect to the policy decisions that have been made and to minimise the risk of unintended consequences of change.
The draft Bill does not contain specific registration or licensing requirements for company liquidators and administrators (the latter will conduct voluntary administrations under the voluntary administration regime that the Bill will introduce). During the course of the review, the Government has received feedback from those involved in liquidations and business rehabilitation suggesting that further regulation may be desirable.
The issues of wages in lieu of notice was identified by the Commerce Select Committee during its consideration of the Status of Redundancy Payments Bill. In response to the Select Committee's report, the Ministry is seeking comments on the priority that such entitlements should receive when the notice period begins or continues after liquidation commences.
Draft Insolvency Law Reform Bill: Discussion Document
Discussion Document released in April 2004 on the draft Bill, regulation of insolvency practitioners and payment in lieu of notice.
Other Documents
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