New laws will encourage “honest” directors to take reasonable risks so companies can trade their way out of financial difficulty, as part of a push to make Australia more entrepreneurial.
Legislation introduced to federal Parliament on Tuesday will afford directors legal protection from insolvency breaches while they are undertaking a restructure.
Under the “safe harbour” provision, directors will not be held liable for an insolvent company’s debts if they can prove their behaviour was “reasonably likely” to lead to a better outcome than immediate administration or liquidation.
“Whether a course of action is reasonable will vary on a case-by-case basis depending on the individual company and its circumstances,” an expla…
Read the full article at: http://www.afr.com/news/politics/insolvency-safe-harbour-for-diligent-directors-20170328-gv8c46
