Update – Reducing the Bankruptcy Period

Following a report and recommendation from the Senate Legal and Constitutional Affairs Committee, the bankruptcy period is now set to be reduced from 3 years to 1 year.

Insolvency Law Reforms – Removing ‘Ipso Facto’ Clauses

The Government have introduced amendments to insolvency laws, restricting parties from relying on ipso facto clauses triggered by insolvency events.

Director Safe Harbour Protection – Insolvent Trading

The Government has introduced a safe harbour for company director’s from personal liability for insolvent trading claims in an effort to facilitate the restructure and turnaround of struggling companies.

Reducing the Bankruptcy Period

The Australian Government has introduced a Bill to reduce the bankruptcy period from 3 years to 1 year, furthering their efforts under the National Innovation and Science Agenda. The Government considers a reduction in the bankruptcy period is necessary to drive a cultural shift in our perception of business failure and to promote entrepreneurial activity. However, the policy raises significant concerns in relation to increased creditor risk.