6. October 2010 11:33
Volume 11, issue 2 of the Insolvency Law Bulletin is now online.
We note in particular the article by The Eye regarding the recent Senate Report into the corporate insolvency industry:
The Report’s view is that a separate insolvency regulator is required, one that is focused on the rather unique responsibilities of practitioners in conducting an insolvency administration. This would serve to free corporate insolvency from ASIC’s general regulatory approach in relation to the very different players and their conduct in the markets and securities area, which are the main focus of ASIC’s broad responsibilities.
Underlying this recommendation is the fact that many of the basic regulatory issues in both personal and corporate insolvency are the same — independence, remuneration, sale of assets, conduct of litigation, and dealing with creditors. A merger would promote common regulatory approaches, as opposed to disconnected ones; cross-fertilisation of expertise between personal and corporate, instead of the silo mentality that often exists; and, on a practical level, individuals who are both trustees and liquidators would be reviewed and regulated by the one agency.
This is the main recommendation in the Report and it is “bold and substantive”, as the Report says of all of its recommendations, and therefore involves major change. It is therefore likely to be resisted. Corporate insolvency’s connections with corporate law are seen as close and needy enough for it to remain in that fold, rather than being hived off, as it is seen, to personal insolvency — its simple cousin. That attitude from corporate insolvency may illustrate the source of its problem which has led to its laws, regulation and administration lagging behind more advanced initiatives in bankruptcy.