TMA Submission – Insolvency Reforms to support Small Business
Turnaround and restructuring naturally lie at the heart of the Turnaround Management Association (“TMA”) Australia. That is why, with Australia facing a pandemic induced recession through no fault of its own, the TMA supports SME law reform which promotes restructuring of businesses facing insolvency through no fault of their own.
Yesterday the TMA submitted its response to Treasury in respect of the Corporations Amendment (Corporate Insolvency Reforms) Exposure Draft 2020. You can view the TMA’s submission – here
Consistent with our engagement with Treasury since the onset of COVID-19, the TMA has put in a huge amount of work and thought into our response. The submission is considered, detailed and solution focused.
The critical themes are:
- A restructuring practitioner should personify and be true to the chosen description. Submission 36 sets out our rationale and the appendixes provide an analytical framework to assist in the definition of suitably qualified restructuring professionals.
- To survive during a debtor-led restructuring process, the debtor will need the support of its trade and finance creditors. The priority of debts incurred during this period need to be certain and clear. Submissions 17, 19 and 40 address the central issues of priority of debts incurred.
There is a lot left to regulation – including how best to balance between protection of employee entitlements and keeping alive the prospect of ongoing employment. The TMA commits to working with you and other bodies such as the Australian Institute of Company Directors and the Business Council of Australia to make the reform work as intended.
The work will not end with legislative drafting. Clear, easy to use online guides and precedents will be essential to the bring the reform to life. This is particularly important given the focus on helping financially distressed small business to help themselves. The TMA and its members will help to develop the material required to make the reform work in practice.
As we move to a new generation of restructuring and insolvency law reform, it was particularly encouraging to see young members working into the early hours of the morning together with established board members to craft the submission. They are named below as part of our team which has worked on the submission and will keep on working on these and other reforms to make our turnaround, restructuring and insolvency frameworks as best as they can be to meet the economic challenges posed by COVID-19.
- Paul Apathy, TMA Director (Partner, Herbert Smith Freehills)
- Jacob Lancaster (Herbert Smith Freehills)
- Hongbei Li (Herbert Smith Freehills)
- Angus Dick (Herbert Smith Freehills)
- Jennifer Ball, TMA Director (Partner, Clayton Utz)
- Alexandra McCulloch (Clayton Utz)
- Michael Sloan, TMA Director (Partner, Ashurst Australia)
- Gayle Dickerson, TMA Director (Partner, KPMG)
- Sam Marsden, TMA Director (Partner, Deloitte)
- Jane Starkins, TMA Director (State General Manager VIC, Scottish Pacific)
TMA Australia President