Thousands of small businesses on the brink of collapse will be thrown a lifeline under new reforms to bankruptcy laws.
The changes, to be unveiled by Treasurer Josh Frydenberg on Thursday, will cover around three-quarters of businesses subject to insolvencies today.
They will draw on key features of the Chapter 11 bankruptcy code used in the United States.
Key elements of the reforms include:
- The introduction of a new debt restructuring process for incorporated businesses with liabilities of less than $1 million
- Moving from a one-size-fits-all creditor in possession model to a more flexible debtor in possession model, allowing eligible small businesses to restructure existing debts while remaining in control of their business
- A period…
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