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ARTICLE · 22 JUNE 2020

COVID-19 response: Changes to insolvency laws

Holding Redlich
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Because of COVID-19 challenges facing businesses, the Australian Government has relaxed laws relating to insolvency.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Chris Brodrick
Chris Brodrick
Nicola McGrady
Nicola McGrady
Mitchell Waters
Mitchell Waters
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The increasing spread of COVID-19, and now the unprecedented measures being taken by governments to slow that spread, is having and will continue to have a significant impact on economies around the globe, including Australia. As the situation has not been seen before, it is difficult for businesses and individuals to plan ways to limit the impact on their ability to continue trading – and pay their debts.

In recognition of the unique challenges facing businesses today, the Australian Government has responded by acting to relax laws relating to insolvency.

Key points for businesses and individuals to be aware of include:

  • directors will be relieved of their personal liability for insolvent trading for a period of six months. However, egregious cases of dishonesty and fraud will still be subject to criminal penalties

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This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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