But Australian Restructuring Insolvency & Turnaround Association chief executive John Winter said that could be a dangerous path.
“A move to a debtor-friendly system is going to send shockwaves through any business that provides loans or trade credit,” Mr Winter said.
“It’s all based on this notion that some people who ruined a business should be left in charge and that their creditors, generally other SMEs and tradies, just have to eat their losses, which of course creates the domino effect of financial distress.
“A debtor in possession regime means greater risks for creditors who will have less rights to enforce against a business that isnt paying their debts,” Mr Winter said.
King & Wood Mallesons partner Tim Klineberg said while th…
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