Australia has been criticised for having punitive insolvency laws that snuff-out directors enthusiasm to save companies facing financial and operational headwinds for fear of falling on the wrong side of an insolvent trading claim.
The Australian Government has addressed the apparent lack of a turnaround culture (relative to other comparable jurisdictions) by introducing a safe harbour regime.
This means company directors will not be personally liable for insolvent trading if, after suspecting insolvency, they begin to develop one or more courses of action” that are reasonably likely to lead to a better outcome for the company that is, a better outcome than the immediate appointment of a voluntary administrator or liquidator.
Directors n…
Read the full article at: https://thewest.com.au/business/boards/why-turnaround-safe-harbour-laws-for-company-directors-makes-sense-ng-b88650515z