Directors no longer have the protection of the COVID Safe Harbour insolvency rules put in place to deal with the impact of the pandemic.
These rules, which absolved directors from personal liability if their businesses traded while insolvent, have been replaced by legislation that includes a new, streamlined SME restructuring process that came into force on January 1st.
The process essentially enables a business to draw up a restructuring plan for paying back creditors. Along with a proposal statement that includes a schedule and amounts, the plan can specify repayment options, such as repaying as proportions of debt owing or proposing the precise cents in the dollar creditors would receive.
Importantly, the restructuring plan includes …
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