Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (130 of 2020)

Schedule 2   Temporary relief for companies seeking a restructuring practitioner

Corporations Act 2001

3   After section 588GAAB

Insert:

588GAAC Safe harbour - temporary relief for companies looking for a restructuring practitioner

Safe harbour

(1) Subsection 588G(2) does not apply in relation to a person and a debt incurred by a company if:

(a) the company is eligible for temporary restructuring relief when the debt is incurred; and

(b) the debt is incurred in the ordinary course of the company's business; and

(c) the company has taken all reasonable steps to appoint a restructuring practitioner before the debt was incurred.

(2) A person who wishes to rely on subsection (1) in a proceeding for, or relating to, a contravention of subsection 588G(2) bears an evidential burden in relation to that matter.

When the safe harbour does not apply

(3) Subsection (1) is taken never to have applied in relation to a person and a debt in circumstances prescribed by the regulations for the purposes of this subsection.

Definitions

(4) In this section:

evidential burden , in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.