The Federal Government has today announced a package of insolvency law reforms which will include:

• a default bankruptcy duration of one year (currently three years);
• protection from insolvent trading claims for directors who appoint a qualified restructuring advisor to develop and implement a turnaround plan; and
• protection against “ipso facto clauses” which would otherwise permit suppliers to terminate contracts with companies undergoing a formal restructure.

Noting that Australia’s appetite for risk is “lower than in comparable countries” Prime Minister Malcolm Turnbull – who is also the Minister for Industry, Innovation and Science – has announced the reforms as part of several measures designed to “help businesses embrace risk” and achieve other objectives.

A summary of the reforms, and details about where to find out more, are available on the National Innovation & Science Agenda website.