Productivity Commission, Draft Report, Business set-up, transfer and closure, 2015 (PC 2015)

The laws relating to corporate insolvency are contained in the Corporations Act 2001, the Corporations Regulations 2001 and the Australian Securities and Investments Commission Act 2001, while the laws relating to personal insolvency are fully contained in the Bankruptcy Act 1966 and the Bankruptcy Regulations 1996.

ASIC is the corporate insolvency regulator, while AFSA is the personal insolvency regulator.

The Treasury has responsibility for corporate insolvency policy. The Attorney-General's Department has responsibility for personal insolvency policy.

The Assistant Treasurer has responsibility for corporate insolvency. The Attorney-General has responsibility for personal insolvency.

Report of the Review Committee on Insolvency Law and Practice (1982) Cmnd 8558; Insolvency Act 1986 (UK).

Because of the low level of statistical data previously obtained in relation to the corporate insolvency industry, as critically commented on by the 2009 Senate Inquiry and the 2014 Senate Inquiry into the Performance of the Australian Securities and Investments Commission, the ability to quantify these problems is limited. See chapter 9 of the 2014 Senate Committee Report.

Options Paper, A Modernisation and Harmonisation of the Regulatory Framework applying to Insolvency Practitioners in Australia, June 2011 (2011 Options Paper); Proposals Paper, A Modernisation and Harmonisation of the Regulatory Framework applying to Insolvency Practitioners in Australia, December 2011 (2011 Proposals Paper); draft Insolvency Law Reform Bill 2012 (draft 2012 Bill); draft Insolvency Law Reform Bill 2014 (draft 2014 Bill).

Report 430 - ASIC regulation of registered corporate insolvency practitioners: January to December 2014, April 2015.

Page 449.

Annual Review of Regulatory Burdens: Business and Consumer Services - Research Report, 2010, Productivity Commission.

Annual Review of Regulatory Burdens: Business and Consumer Services - Research Report, 2010, Productivity Commission. These concerns continue to be raised including by the peak insolvency body during the 2014 Senate inquiry into ASIC performance.

Claessens, Stijn, and Leora Klapper. 2003. 'Bankruptcy around the World: Explanations of Its Relative Use.' Policy Research Working Paper 2865, World Bank, Washington, DC.

'For example, the recovery rate in Australian insolvencies is around 82 per cent of secured debt, compared with 80 per cent in the United States and 89 per cent in the United Kingdom.' Productivity Commission, 2015, Business set-up, transfer and closure.

Productivity Commission, 2015, Draft Report: Business set-up, transfer and closure.

Institute of Chartered Accountants, Submission to the Senate Committee Inquiry (Submission 66); Senate Committee Report, paragraph 11.35.

Senate Committee Report, paragraph 11.47.

Senate Committee Report, paragraph 11.51.

If a corporate insolvency practitioner wishes to accept appointments to a liquidation commenced in a Court, provisional liquidations or certain cross-border insolvency matters, the corporate insolvency practitioner must apply to ASIC to be registered as an 'official corporate insolvency practitioner'.

Phillips, A, An analysis of official liquidations in Australia, February 2013

See Senate Committee Report, page 76; Mr Geoff Slater, Committee Hansard, 13 April 2010, p. 47; Mr Vanda Gould, Committee Hansard, 13 April 2010, p. 20.

Annual Review of Regulatory Burdens: Business and Consumer Services - Research Report, 2010, Productivity Commission, page 172.

Section 1284 of the Corporations Act.

For example, see Remuneration and the importance of proportionality, HWL Ebsworth Lawyers, 27 April 2015; In the matter of AAA Financial Intelligence Ltd (In Liquidation) [2014] NSWSC 1270; In the matter of On Q Group Limited (In Liquidation)(Subject to Deed of Company Arrangement) [2014] NSWSC 1428 Australian Securities and Investments Commission v Letten (No 23) [2014] FCA 985.

ASIC submission to the 2010 Senate Inquiry

Phillips, A, An analysis of official liquidations in Australia, February 2013

ASIC Report 412, Insolvency statistics: External administrators' reports (July 2013 to June 2014), September 2014, page 26.

Phillips, A, An analysis of official liquidations in Australia, February 2013

The 'client' in an insolvency administration is ordinarily the creditors as a whole (which is potentially a diffuse group of individuals or organisations).

These amendments would not affect the regulatory framework for the registration and deregistration of debt agreement administrators under the Bankruptcy Act.

This scheme is based on recommendations made in the Harmer Report.

Page 3 Industry Self-regulation in Consumer Markets prepared by the Taskforce on Industry Self-regulation; 'Bankruptcy and Insolvency: Change, policy and the vital role of integrity and probity', the Hon. Michael Kirby, address to IPA National Conference, 19 May 2010, page 25.

The Hon. Michael Kirby, as above, page 23.

The Hon. Michael Kirby, as above, page 24.

Section 1284 of the Corporations Act.

A member of a company is commonly called a shareholder.

Education expenses and ongoing savings resulting from all recommended options has been estimated as an aggregate figures. It is estimated that there will be costs of $50,000 per practitioner operating in the corporate insolvency market; and $5,000 per firm operating plus $2,000 per practitioner.

It is estimated that this new power will result in additional compliance costs for practitioners and creditors by extension, of an average $500,000 per year. This figure is based on an assume cost of $100,000 per request, with the power being exercised in five large administrations per year. This cost will not be included in the formal RBM because it is classified as a cost that arises indirectly from the impact of the regulatory change (indirect cost) under the RBM framework, which is excluded from the RBM.

Re The Bell Group Ltd (in liquidation); ex parte Woodings [2015] WASC 88

ARITA Code of Conduct, clause 15.2.2.

See submissions of the IPA and ICA to the Options Paper: A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia.

Where the liquidation has commenced as a result of the directors actions it can be expected that directors are more engaged in the process as they are responsible for commencing the external administration in the first place.

Section 77CA of the Bankruptcy Act; with an offence provision for non-compliance in section 267B.

Keenan P J, An appraisal of the report as to affairs, March 2012.

FSI 2014, page 266