Author

Peter Lucarelli

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Directors of Australian companies face significant personal monetary – and potential criminal and adverse professional – consequences if they allow the company to trade whilst insolvent. Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK. Accordingly, frequent assessment of a company’s solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address…

This document provides a summary of the most common Australian formal corporate insolvency regimes, namely: • voluntary administration; • receivership; and • winding up. It also covers creditors’ schemes of arrangement which are increasingly being used in larger restructurings. Some other types of formal insolvency regimes that are less common are not covered and are beyond the scope of this document, for example, provisional liquidation and informal insolvency mechanics, such as workouts. Read the complete…