Associate Commerce Minister, Laila Harre, has announced the first stage of insolvency law changes following the tier one review of New Zealand insolvency law.
The review is the first major amendment of insolvency law in New Zealand
since 1967. The proposed changes cover cross border insolvency, bankruptcy,
voidable transactions and priority debts, and include the:
adoption of the UNCITRAL (United Nations Commission on Trade Law) modellaw on cross border insolvency which will not come into force until Australia has adopted the model, which it is in the process of doing amendment to the current statutory limits for bankruptcy, in particular an increase in the minimum amount for which a creditor's petition may be issued from $200 to $1,000, and an increase in the value of assets a bankrupt can retaintransfer of a number of administrative functions from the courts to the Official Assignee removal of the "ordinary course of business" exemption from the voidable preference test, and the adoption of the Australian test and defences in relation to voidable preferences creation of a new priority for creditors who assist liquidators (ie. by funding recovery actions) increase in the maximum priority for employees from $6,000 to $15,000 and the inclusion in this priority of redundancy pay as well as wages removal of priorities under the Fisheries Act and Radiocommunications Act.The current priorities for PAYE, GST, withholding tax and custom duties are to be retained.
It is not known when the above proposals will be put into effect. The
Government is also to complete the tier 2 and tier 3 stages of the Insolvency Law Review. These stages include business rehabilitation, the role of state in insolvency and statutory management procedure and will not be completed until next year.
This article is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely
on this article.
CopyrightPhillips Fox, November 2001
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