ARITA makes submission to parliamentary inquiry into
corporate insolvency in Australia
The Australian Restructuring Insolvency & Turnaround Association has provided its submission to the Parliamentary Joint Committee’s inquiry into Australia’s corporate insolvency law.
While ARITA’s submission fully addresses the Committee’s terms of reference, it has taken this opportunity to advocate for a more fundamental root and branch review of Australia’s insolvency system.
Building on the recent work of the Australian Law Reform Commission in relation to the financial services provisions of the Corporations Act 2001 (Cth), ARITA believes the time has come for a fundamental simplification of the design and drafting of the law.
ARITA argues that Australia needs a single unified insolvency law that encourages a turnaround and restructuring culture that is focused first on saving viable but distressed businesses, enhances creditor outcomes by reducing unnecessary processes and other regulatory burdens, and deals effectively with malfeasance on the part of both business operators and insolvency professionals.
Such a law would be administered by a new, for-purpose agency whose task would be encouraging a turnaround culture, increasing the understanding of business operators about their opportunities and obligations when their businesses are in trouble, and enforcing the law in a rigorous way.
ARITA’s submission makes 36 recommendations for the Committee to adopt including a range of immediate actions that the government could take to improve the insolvency regime while a root and branch review is completed.
ARITA CEO John Winter, ARITA President Michael Brereton and ARITA Technical and Standards Director Narelle Ferrier will attend a Committee hearing on Wednesday 14 December.
Click here to download a copy of ARITA’s submission.