Implications of disclosing restructure plans to creditors when entering safe harbour

What you need to know

• Australia's new safe harbour laws are now in force, providing a helpful regime for directors of a struggling company to pursue restructuring efforts without fear of liability for insolvent trading, but leaving some gaps around the protection of third parties dealing with the company.
• Directors will need to consider whether to inform creditors about the company's position, while trade creditors who are told about a restructure plan and continue to support a company through the safe harbour period may find themselves in a difficult position if the restructure plan is ultimately unsuccessful.