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ARTICLE · 11 OCTOBER 2020

Christmas 2020 – Insolvencies loom

Surry Partners
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It is likely that many statutory demands will be issued in early 2021 due to the moratorium lapsing on 31 December 2020.

AustraliaInsolvency/Bankruptcy/Re-Structuring
James Hamilton
James Hamilton
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A perfect storm is brewing this Christmas for distressed companies.

The factors at play are:

  • The moratorium on issuing statutory demands ends on 31 December 2020;
  • The NSW commercial tenancy COVID relief measures expire on 31 December 2020;
  • The limited ‘safe harbour' on directors insolvent trading ends on 31 December 2020;
  • Banks are now renegotiating deferred loan obligations;
  • There is no moratorium operating on the director penalty notices regime;
  • Courts are on vacation for Christmas until the end of January and operate with a vacation judge with limited workload capacity; and,
  • Most businesses shut on or before 24 December 2020 for at least one week and 31 December 2020 falls in the week where most of NSW will be on holiday.

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