The Coronavirus Economic Response Package Omnibus Act 2020 (Cth) was assented to early last week on 24 March 2020, in response to the ongoing coronavirus pandemic. These amendments to the Corporations Act 2001 (Cth), Bankruptcy Act 1966 (Cth), Corporations Regulations 2001 and Bankruptcy Regulations 1996 provide more leniencies to corporations and individuals that may be in distress during the coronavirus pandemic.
Here is a quick comparison of the key features of the new temporary laws introduced against the current law regarding insolvency that have been put into place:
New Law (temporarily)
A point to keep in mind, changes have been made to wording of the relevant provisions in the Corporations Act 2001, and Bankruptcy Act 1966, with instances of the prescribed periods within those acts, e.g “21 days”, substituted with the words “the statutory period”. A definition for “the statutory period” has also been added into the dictionary sections of those Acts, being s 9 and s 5 respectively. The relevant counter-part regulations (Corporations Regulations 2001 and Bankruptcy Regulations 1996) have also included a provision automatically repealing the above leniencies after 6 months from the date they come into effect (being 24 September 2020).
This could mean that, if the wording of “the statutory period” is retained within these Acts and Regulations beyond the 6 months, or even after the coronavirus pandemic has subsided (if it subsides), practitioners should ensure they also check Regulations as well as the Acts for the relevant periods.
For further details regarding these changes, or if you think that these changes might affect you, do not hesitate to get in contact with us.