The report (REP 756) outlines the findings from ASIC’s review of the ASIC company register and ASIC lodgements data for all 82 small-business restructuring practitioner appointments that commenced in the review period and the outcomes of those restructurings to 30 September 2022.
This is ASIC’s first report since reforms were introduced on 1 January 2021 to create a new simplified debt restructuring process for eligible small businesses and a new type of registered liquidator. Importantly, the new small-business restructuring was the first type of formal insolvency appointment that left the control of the insolvent company in the hands of the directors — not the appointed registered liquidator.
The key observations from the report include:
There were 82 restructuring practitioner appointments during the review period. From those appointments, 72 transitioned to restructuring plans from the 78 proposed. The balance of 10 appointments was either terminated on the basis the company was not eligible, creditors rejected the proposed plan, or the directors ended the restructuring appointment.
All the registered liquidators appointed as restructuring practitioners during the review period were those registered to practise as external administrators of companies (including as restructuring practitioners), receivers, and managers. To date, one person has been registered as a registered liquidator to practise only as a restructuring practitioner for a company or for a restructuring plan.
Based on information reviewed to 30 September 2022, ASIC identified:
- Creditors approved the majority (72) of the 78 sent to affected creditors (92 per cent).
- Where a restructuring plan was accepted, 47 plans were effectuated (65 per cent), one plan was terminated (2 per cent), and 24 plans were ongoing as at 30 September 2022 (33 per cent).
- The majority of companies where a restructuring plan was effectuated or was ongoing appear to be continuing to operate their business (66 per cent).
- the ATO was a creditor in 89 per cent of companies that entered a restructuring plan and was a major creditor in 79 per cent of those companies.
