COVID Implications & Updates for Insolvency Practitioners

Dear All,

Given the current circumstances surrounding COVID19, we thought the attached fact sheet may be of particular interest to insolvency practitioners.

The Australian government has just announced temporary measures, that will be in place for the next 6 months, that has the effect of:

1. Increasing the minimum amount of debt to $20,000 for a creditor to issue either a bankruptcy notice or statutory demand to the debtor;
2. Extending the period of time to comply with a bankruptcy notice and statutory demand from 21 days to 6 months;
3. Extending the period of time a declaration of intention to voluntarily enter bankruptcy is effective from 21 days to six months;
4. Relieving directors of their duty to prevent insolvent trading for a period of 6 months (the criminal penalties for director dishonesty and fraud with respect to insolvent trading will remain in place); and
5. Power has also be given to the Commonwealth Government Treasurer to temporarily amend provisions of the Corporations Act 2001 without needing to have an Act passed by parliament, to enable to Treasurer to quickly provide relief from certain provisions of the Act during the crisis.

For More Information:

For more information on the Australian Government’s Economic Response to the Coronavirus visit: treasury.gov.au/coronavirus.