Insolvency law needs a complete overhaul and a new regulator because the current system is unfit for purpose, the Australian Restructuring, Insolvency and Turnaround Association (ARITA) says in its submission to the government investigation on the matter.
ARITA chief John Winter said the law was simply “too damn hard” and deterring struggling businesses from doing the right thing.
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“Something like 50,000 businesses a year are simply deregistered and exit,” he said — five times the number that go through the insolvency process.
“That’s problematic because it means there’s wholesale avoidance of the insolvency regime and that comes with lots of risks,…