CLIENT ALERT: INSOLVENCY AND BANKRUPTCY PROTECTIONS EXTENDED
On 7 September 2020, the Federal Government announced that the temporary changes to the creditors’ statutory demand and insolvent trading laws have been extended to 31 December 2020.
Regulations will be made to extend the changes originally announced in March, from 25 September to 31 December 2020 and include:
- Increasing the threshold at which creditors can issue statutory demands to a company, from $2,000 to $20,000;
- Increasing the threshold at which creditors can initiate bankruptcy proceedings against a company from $5,000 to $20,000;
- Increasing the time companies have to respond to statutory demands and bankruptcy notices from 21 days to 6 months;
- Temporary relief for directors from any personal liability for insolvent trading.
review their strategy.