Insolvency and restructuring

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

In Brief

  • Insolvency and restructuring are considered specialised services. Maintaining a high level of ethics and standards is important for those working in this field
  • A statutory licensing regime for insolvency practitioners began in New Zealand on 1 September 2020
  • The New Zealand Institute of Chartered Accountants is an accredited body under the Insolvency Practitioners Regulation Act 2019 and can issue insolvency practitioner licences from 1 September 2020
  • 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

New Zealand insolvency practitioners are now regulated under the Insolvency Practitioners Regulation Act 2019 (the Act).

Under the Act, insolvency practitioners will have to apply to an accredited body (for example NZICA) to obtain a licence and become a licensed insolvency practitioner. In most circumstances, it would be an offence to undertake an insolvency engagement without a statutory licence.

The statutory scheme replaced the voluntary CAANZ/RITANZ accreditation scheme. Applications to that scheme closed on 31 July 2020.

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
  • Aim to combat illegal phoenix activity
  • Provide directors with Director Identification Numbers (DIN) as a part of the modernising business registers project

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

The Government has also made temporary changes to the Bankruptcy law as a part of its response to COVID-19 by temporarily increasing the debt threshold, increasing the timeframe to commence bankruptcy proceedings as well as extending the temporary protection period.

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

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
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
Bruce Gleeson FCA Jones Partners NSW
Hayden White CA KPMG WA
Andrew Heard FCA Heard Phillips Lieberenz SA

Recent insolvency submissions and articles

Keep up to date with insolvency submissions and articles in Australia, New Zealand and Overseas.

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