When Australia introduced the safe harbour regime in 2017, it was widely seen as a step toward rescuing more businesses by leveraging the expertise of experienced turnaround professionals before the business reached a financial tipping point. During pre-insolvency appointments, insolvency professionals gain a deep understanding of the business, and often become a trusted advisor, even if the safe harbour does not ultimately lead to a better outcome. In such a case, the business may look to appoint that insolvency professional as external administrator, given their unique history with and understanding of the business, and their personal relationships with the decision-makers in the business.
However, the principles of…