Response to the Treasury ‘National Innovation and Science Agenda–Improving corporate insolvency law’ 2017 (3273)
The submission to the Treasury's Exposure Draft ‘National Innovation and Science Agenda – Improving corporate insolvency law’ was prepared by the Insolvency and Reconstruction Committee and the Corporations Committee of the Business Law Section.
The Committees support the introduction of a carve out for insolvent trading to facilitate and support reasonable and appropriate restructuring efforts by company directors. The Committees believe however that there are some aspects of the proposed drafting that could be clarified to ensure that the proposed amendments meet their stated goal.
The Committees support the introduction of a limited prohibition on the enforceability of ipso facto clauses during restructuring efforts using a creditors’ scheme or voluntary administration and support the need to target these reforms to contracts that unduly inhibit good faith restructuring efforts.
The submission includes several matters that could be addressed in order to ensure that the proposed amendments will facilitate restructuring efforts without unnecessarily constraining a variety of legitimate commercial arrangements or the efficient and effective operation of financial markets.
You can read the full submission below.