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Corporate Compliance

Australia: Overview of the Australian Insolvent Trading Prohibition and the Safe Harbour Protections

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Directors of Australian companies face significant personal monetary – and potential criminal and adverse professional – consequences if they allow the company to trade whilst insolvent.

Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.

Accordingly, frequent assessment of a company’s solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.

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Author

Maria O’Brien is the head of the Restructuring & Insolvency practice at Baker McKenzie's Australian offices. She previously led the Firm's Asia Pacific Restructuring & Insolvency Working Group and is a member of the Global Restructuring & Insolvency Steering Committee. Maria is a Fellow of INSOL International (the International Association of Restructuring, Insolvency & Bankruptcy Professionals), and is the President of the Turnaround Management Association (Australia). Maria has been ranked as a Leading Individual in Restructuring/Insolvency by Chambers Asia Pacific every year since 2011 and has been ranked in the peer-assessed Best Lawyers for Insolvency and Reorganisations every year since 2009. She was the winner of the International Women's Insolvency & Restructuring Confederation NSW's inaugural Award for Outstanding Female in the Insolvency and/or Restructuring Industry in 2009.

Author

Peter is a partner in Baker McKenzie's Dispute Resolution & Restructuring & Insolvency group. For more than twenty five years, Peter has advised on a range of complex commercial and contract disputes, class action litigation, and insolvency and restructuring matters for a range of foreign and domestic clients including multinational and domestic corporations, ASX listed entities, financial institutions, and insolvency practitioners.

Author

Ian is a partner in the Brisbane office. He is a highly experienced insolvency, litigation and dispute resolution lawyer, having acted for a broad range of organisations in both the private and public sectors within Australia and internationally. Ian also has extensive experience gained across a range of industries in an insolvency context for financial institutions, insolvency practitioners and creditors.

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