The government’s insolvency reforms, which commenced on 1 January 2021, created a new simplified liquidation and new debt restructuring process for small companies/SMEs in particular and have provided directors with the control and flexibility they need to either restructure their business or wind down operations.
In essence, the reforms have allowed viable businesses to survive, or else wind up and move on as quickly as possible, thereby maximising any returns available for creditors and shareholders.
It is unlikely that we will see the same level of insolvency reform in 2022 as the economy steadily recovers from the effects of Covid-19 and businesses adapt to working in a post-pandemic environment with both the challenges and opportunities, that brings. However, the government has announced a number of bankruptcy & insolvency measures that they are seeking to implement.
Many of these measures have already been the subject of a formal consultation process from either the Department of Treasury or the Attorney-General’s Department. However, the federal election on 21 May 2022 may have an impact on which of these suggested reforms proceed. It is very much a case of watching this space.
This Guide takes you through the main proposed developments for 2022 to ensure you remain informed and can, in turn, adequately and competently advise your clients.