Insolvency and the Biosecurity Act

In January 2020 the COVID-19 coronavirus was declared a Listed Human Disease, meaning the Biosecurity Act 2015 (Cth) can now be used by Government to its full effect.

It means (amongst other things) a person can be directed or forced to self-isolate for an indefinite period of time.

Covid-19

In the context of the insolvency profession why is this important? For example, let’s assume you are forced into isolation:

– if a statutory demand is issued on your company’s registered office, the process to set aside the wind-up application is expensive, and there are no carve-outs for events of God (like a pandemic). I suggest organising mail-forwarding to your house, or seek professional advice from your lawyer or accountant

– insolvency practitioners (IP’s) face some of the harshest penalties and convictions if they miss the deadline of a lodgement or report. ASIC needs to be proactive and set out guidelines on their expectations here

– what if an IP’s entire office is forced to isolate at home? Do we have sufficient pandemic plans in place to deal with the issue?

– if you’re not sick, but can’t run your business, can you be sued for insolvent trading under ss 588G and 588M of the Corporations Act 2001 (Cth)? I think you can make out a pretty solid defence

– will the ATO grant safe harbour?

– if the second VA meeting is due to be held tomorrow, one school of thought (excl court order) says you can only adjourn for 7 days. Another says it can be indefinite. See for example 75-50(1) and 75-105(4) of IPS-C:

75-50

75-105(4):

75-105

What is your pandemic plan?

#coronavirus #SVVoidables #SVVoidables100

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