Federal Government to adopt US-style insolvency rules to help with expected wave of business closures

The Federal Government is planning to overhaul insolvency rules, adopting an American-style model to help small businesses struggling because of the coronavirus pandemic to either restructure or fold.Finance bodies expect a wave of insolvencies when emergency protections for business owners expire at the end of the year

The new system would be two-tiered, with large companies required to work under existing insolvency rules while business with liabilities of less than $1 million having a simpler system. For small businesses that can't be revived, liquidation would be changed, too, in an effort to make it quicker and easier.

"The Government's new reforms draw on key features of the US Chapter 11 bankruptcy process allowing small businesses to restructure their debts while remaining in control of their business."The number of companies entering external administration is down 46 per cent compared to last year, with many unviable businesses being propped up by the Federal Government's JobKeeper wage subsidies.

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Only 631 registered liquidators in the country. COVID-19 moratorium too successful; artificially suppressing a healthy level of insolvencies. New legislation to cope with amidst the 2021 avalanche? Can't see it being priced reasonably or being that accessible.

Which of his mates did he have secret meetings with, to come up with this change in the law?

Yes that's a good idea.

The kicker here is the creditors to these businesses will bare greater costs for risk takers, people running businesses will simply go bankrupt when they stuff up or want to pilfer more, employees, creditor, super etc will all suffer look at the US auspol

Of course they will they pay American policy consultants millions to a year too to show the LNP how to ruin the country and feather their own nests!

American-style anything....sounds promising 🤦‍♂️🤦‍♂️🤦‍♂️🤦‍♂️ FMD

Aussie business operators will take anything they can get. This could be their lifeline.

So. What do the LNP gain from this? That's the only reason they do anything so any wonder they've done bugger all for small business.

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Source: SkyNewsAust - 🏆 7. / 78 Read more »