On 1 January 2021, the Federal Government’s post-COVID small business restructuring reform package came into effect. This package introduced into the Corporations Act 2001 (Cth) (Corporations Act):

  • two new insolvency regimes for companies with liabilities of less than AUD 1 million, namely:
    • a “debtor in possession” restructuring and restructuring plan process (Restructuring)
    • a simplified liquidation process (Simplified Liquidation)
  • temporary insolvency relief for companies (and their officers) that wish to enter restructuring but cannot find a registered liquidator able to act as the Restructuring Practitioner (RP) for the restructuring during the period 1 January 2021 to 31 March 2021, including:
    • a temporary insolvent trading safe harbour for directors in respect of debts incurred in the ordinary course of business
    • a temporary increase to statutory demand thresholds of AUD 20,000 and 6 months (otherwise AUD 2,000 and 21 days, respectively)

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Partner, Sydney
Email: Maria O'Brien

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Partner, Brisbane
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Partner, Melbourne
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Senior Associate, Sydney
Email: Jessica Arscott