find the latest legal job
Corporate/Commercial Lawyers (2-5 years PAE)
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Specialist commercial law firm · Long-term career progression
View details
Graduate Lawyer / Up to 1.5 yr PAE Lawyer
Category: Personal Injury Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Mentoring Opportunity in Regional QLD · Personal Injury Law
View details
Corporate and Commercial Partner
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Full time · Join a leading Adelaide commercial law firm
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Sydney NSW
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Melbourne VIC
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
Chief Justice rallies insolvency lawyers

Chief Justice rallies insolvency lawyers

The Chief Justice of Western Australia has urged the state's insolvency professionals to consider the costs that flow from a regulatory regime that encourages insolvency over financial restructuring.

The Chief Justice of Western Australia has urged the state’s insolvency professionals to consider the costs that flow from a regulatory regime that encourages insolvency over financial restructuring. 


While noting is far from “doom and gloom” in the country’s most western state, “perhaps regrettably for insolvency practitioners”, the Chief Justice said consideration needs to be given to the offsetting costs of such an environment.


The Honourable Wayne Martin asked the room of insolvency professions to consider the costs that might come out of a regulatory regime that encouraged insolvent administration, and discourages financial restructuring and trading out of difficult. 


He spoke following a Commonwealth Government of an audit of the laws that affect the liability of company directors. He said this “provides a propitious opportunity for the formulation and expression of views in this important area”.


“There are a number of aspects of our regulatory regime which arguably encourage resort to insolvent administration, even in cases in which there is a real prospect that a financial restructure and altered business plan might save the entity involved, to the benefit of its creditors and proprietors,” he said. 


The judge was speaking at a conference for insolvency practitioners on Thursday night, and used the spotlight to raise concerns about insolvent trading laws.


Strict Australian laws currently expose directors to personal liability when a company trades while insolvent. The judge said this may contribute to the creation of a culture in which directors will opt for insolvency administration rather than take the personal risk that might be associated with a restructure aimed at trading out of short-term financial difficulty. 


Chief Justice Martin quoted insolvency practitioner Stephen Parbery, who has argued the laws mean businesses are sometimes closed prematurely. He added that workouts in restructuring can be difficult as directors, banks and advisers will not take the personal risks associated with trading a business on. 


The Chief Justice noted the “peculiar” appropriateness of hosting the national conference at a casino complex, “in which fortunes can be made and lost in a very short period of time, given the frenetic rate of fluctuation in our economic fortunes over the last 12 months or so”. 


On the upside, the Chief Justice said, the laws encourage directors to be aware of their companies’ finances, and encourages them to relinquish control and allow creditors to determine their companies’ future.





Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Chief Justice rallies insolvency lawyers
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Dec 13 2017
Young humanitarian lawyer California-bound
A young Australian lawyer will be travelling to the US next year for a prestigious nine-month study ...
Jackie Rhodes
Dec 12 2017
Report sheds light on LGBTQI inclusion in law firms
A recent report has revealed the varying perceptions on LGBTQI diversity and inclusion in the Austra...
Women in business
Dec 12 2017
Annabel Crabb headlines Women in Business Forum
Political journalist Annabel Crabb has appeared at the Coleman Greig Lawyers Women in Business Forum...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...