The Federal Government is planning to overhaul insolvency rules, adopting an American-style model to help small businesses struggling because of the coronavirus pandemic to either restructure or fold.
- Finance bodies expect a wave of insolvencies when emergency protections for business owners expire at the end of the year
- The reforms will allow small businesses to restructure their debts while remaining in control of their business, the Treasurer says
- The cost of putting a business into administration or liquidation can be so expensive it consumes the remaining assets of small businesses
The new system would be two-tiered, with large companies required to work under existing insolvency rules while business with liabilities of less…