Insolvency and restructuring

Chartered Accountants play a key role in the field of insolvency and restructuring

In Brief

  • Insolvency and restructuring are increasingly viewed as specialised services
  • Maintaining a high level of ethics and standards is important for those working in this field. We support this in New Zealand through the framework we’ve developed with the Restructuring and Insolvency Turnaround Association of New Zealand (RITANZ)
  • In Australia we work with the Australian Restructuring Insolvency and Turnaround Association (ARITA). ARITA is an independent, self-governing association of insolvency specialists.

New Zealand

In November 2016, Cabinet agreed to amend the Insolvency Practitioners Bill to introduce a co-regulatory licensing regime for insolvency practitioners, as well as a number of additional amendments aimed at further raising the practice standards of insolvency practitioners and ensuring they act in accordance with their statutory duties. The co-regulatory regime will build on the self-regulatory regime introduced by CA ANZ and RITANZ in 2015.

Under the new regime, professional bodies, including CA ANZ and RITANZ, will carry out the frontline regulation and the Registrar of Companies (Registrar) will monitor and report on the adequacy and effectiveness of the frontline regulators’ regulatory systems and processes.

As well as introducing a co-regulatory licensing regime for insolvency practitioners, Cabinet also agreed to amend the Companies Act 1993 and Receiverships Act to:

  • Improve the list of automatic practitioner disqualifications;
  • Provide the High Court with an effective means to disqualify practitioners;
  • Increase the difficulty in which debtor friendly liquidators can be appointed; and
  • Void the transfer of a company's assets once a liquidation application has been filed.

Under the proposals, solvent liquidations will be excluded from the licensing regime however they will only be able to be undertaken by lawyers and accountants who are members of a professional body.

The Government is advancing these changes via a supplementary order paper to the Insolvency Practitioner’s Bill, which is currently in the House and can be accessed here.

CA ANZ and RITANZ Accreditation Regime

More information on this regime, including the Register of Accredited Insolvency Practitioners, can be found here

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RITANZ website

The Restructuring and Insolvency Turnaround Association of New Zealand (RITANZ) website can be found here

Visit the website

Australia

The Australian government passed the Insolvency Law Reform Act 2016 on 22 February 2016. This made changes to both bankruptcy and corporate insolvency laws. 

The Government has subsequently made reforms that:

  • Allow directors of financially distressed businesses a new ‘safe harbour’ to turn around their business free of the worry of being personally pursued for insolvent trading actions; and
  • Make certain ipso facto clauses unenforceable so contracts can be terminated in instances of insolvency, when a company is restructuring

Further reforms are currently progressing with the aim to reduce insolvencies by more flexible options to turnaround businesses in crisis.

These include:

  • Reducing the bankruptcy period from three years to one - currently before Parliament
  • Combatting illegal phoenix activity – currently being consulted on
  • Introduction of Director Identification Numbers (DIN) as part of the modernising business registers project
  • Addressing corporate misuse of the Fair Entitlements Guarantee – currently being consulted on.

More information

Visit the Australian Restructuring Insolvency and Turnaround Association (ARITA).

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Engagement standards

Members who carry out insolvency and restructuring engagements must follow prescribed standards. These are for New Zealand, IES: Insolvency Engagements. For Australia, APES 330: Insolvency Services

More information

View the standards in full.

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Insolvency Management Committee

We provide a forum for members interested in insolvency through our Insolvency Management Committee. It offers an opportunity to engage in all forms of insolvency regulation, be part of discussions around best practice, and hear about useful tools and resources. It also provides opportunities to collaborate with other relevant professional bodies.

The committee members are as follows:

Andrew Barden FCA (Chair) Rodgers Reidy NSW
Jason Bettles FCA Worrells QLD
Melissa Humann CA PwC VIC
David Lombe FCA CRG Division, Deloitte NSW
Peter Lucas CA P. A. Lucas & Co QLD
Anne Meagher CA SV Partners QLD
Stephen Michell CA PCI Partners VIC
Alice Ruhe CA SMB advisory VIC & QLD
Austin Taylor FCA Meertens SA