Speaking at the HLB Mann Judd partners' lunch in Sydney, Barry Taylor, who heads up the firm’s business recovery and insolvency team, spoke about impending changes to the Bankruptcy Act and the Corporations Act.
“We’re about to see some changes in bankruptcy and corporations,” Mr Taylor said.
“We haven't had any dramatic changes, certainly in terms of the corps law, since about 1993, and they started talking about these changes back in 2010.”
Mr Taylor said the changes will come under the government’s National Innovation and Science Agenda and will bring the two acts in step with each other.
The amendments will “deal with improving the prospect of restructuring or rehabilitating the company compared to the regime that we have now”, Mr Taylor said.
“It's about improving or incentivising the taking of risk in business.”
While not all of the details are finalised, Mr Taylor said some big-ticket changes can be expected.
“The default period if you go bankrupt is three years, they're talking about reducing that to one year,” he said.
“In terms of the insolvency space, insolvent trading and some other things around the edges are seen as inhibiting the proper restructuring of companies.”
“So in bankruptcy you've got the reduction in the default period, in the insolvency space you're talking about safe harbour.”