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A business law specialist's top four tips for insolvency lawyers

A business law specialist's top four tips for insolvency lawyers

By LIV Professional Development


The recent passing of the Treasury Laws Amendment (2017 Enterprise Incentives No 2) Bill 2017 has been hailed as the moment Australia's insolvency laws were brought into the 21st century. Legislators and the media anticipate that these laws will boost the country's economy, help struggling businesses have a chance to reach their full potential and bring Australia more in line with the economies of other developed nations.

It is critical for lawyers practising in business law, particularly in the areas of bankruptcy and insolvency, to be aware of the new "safe harbours" available for their clients who may be having trouble keeping their businesses afloat.

As an LIV accredited specialist in business law and commercial litigation, Mark Harrick is well versed in the ins and outs of bankruptcy and insolvency law. We spoke with him about the current trends he sees in this area, what lawyers new to the practice should be looking out for and what you can expect if you attend his upcoming workshop at the LIV.

What are some of the current trends you see in corporate insolvency?

The big issue is phoenix companies, where the original owners buy back the business assets – sometimes this is legitimate but at other times it is a breach of a director’s duty to creditors.

(NB: According to ASIC, "Illegal phoenix activity involves the intentional transfer of assets from an indebted company to a new company to avoid paying creditors, tax or employee entitlements.")

What are your top tips for lawyers practising in this area of law?

  1. Be careful when dealing with the ATO with respect to overdue debts. If not handled carefully, the director may become personally liable to the ATO for the company’s debt.
  2. Make sure that you get paid when dealing with insolvent clients.
  3. Make sure that you are aware of the classic signs of insolvency regardless of whether you can read a balance sheet.
  4. Don’t assume that just because your client will become bankrupt, that you can’t provide valuable advice to the bankrupt client and their family.

What can attendees expect to learn by attending your workshop?

  • How to recognise and deal with insolvency issues
  • How to tackle insolvency issues with confidence
  • How to get paid despite the risk of an unfair preference

You have the chance to hear from the expert himself at the upcoming Current Issues in Insolvency workshop on Tuesday 10 October. This is an ideal opportunity for lawyers new to business law to get a comprehensive overview of this topic. Mark Harrick will cover practical considerations when advising insolvent clients, bankruptcy without sequestration, asset protection strategies and much more.

Save 20% on the full Business Law stream of the Academy Series by registering for all four workshops here.

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