The AICD welcomes the progress of this important reform. Australia’s existing insolvency laws are amongst the harshest in the world. The perverse and unintended consequence of the current framework is that directors are forced down the path of formal insolvency too early in circumstances where reasonable prospects of recovery exist, destroying value and jobs.
The AICD welcomes the Bill’s introduction of a safe harbour, balanced with safeguards on important issues such as employee entitlements, as a critical step in building a culture of restructure and recovery in corporate Australia.
In this submission, the AICD has made suggestions for improvements to the Bill that we consider would assist in achieving the policy objectives of the reform, set out below for the Committee’s consideration.
You can read our submission here (432 KB).