Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Latest decisions on Insolvency Law Review

28 February 2002 Media Statement

Latest decisions on Insolvency Law Review


Associate Minister of Commerce, Laila Harré, today announced the latest round of decisions made as part of the Government’s review of Insolvency Law.

“These decisions, and those announced last year reflect the Government’s objective to implement an insolvency regime that effectively balances the interests of debtors and creditors,” said Ms Harré, speaking at a Butterworth’s Insolvency Law Conference in Auckland today.

The decisions announced today form part of the “tier two” decisions of the review and deal with the role of the state within the insolvency regime in four key areas:

 The state’s monopoly in bankruptcy administration;
 The state’s role in enforcement of insolvency law;
 Requirements surrounding the appointment of liquidators; and
 Incentives for insolvency litigation funding.

“Because the government’s Official Assignee is not profit driven, the interests of debtors are better observed by the state than by the private sector, and so we have decided to retain the state’s current monopoly in bankruptcy administration,“ said Ms Harré,

“If you left it up to the private sector, it is likely that it would only be interested in administering the small number of bankruptcies that could meet their costs. This could result in real disincentives for efficient bankruptcy administration.”

The Government has also decided not to make any changes to the way insolvency law is enforced. Insolvency law is enforced by the National Enforcement Unit (NEU).

“Enforcement levels are good by international standards and the NEU has taken considerable steps to clearing the backlog it inherited, so clearly no changes are needed, “said Ms Harré.

In the area of the appointment of liquidators, the Government has decided to improve the appointment procedure for the liquidators by requiring that there has not been a continuing relationship between the debtor company and the liquidator.

“The decision arises out of consultation with the Law Commission which identified two problems with the appointment of liquidators – first, that liquidators are not always impartial, and second that smaller creditors and debtors do not always have access to information to access the skill, competence and impartiality of liquidators.”

“The strengthening of the appointment procedure will address any favouring of particular parties by impartial liquidators.”

The Government has also decided to change the law around the liquidator’s right to sue. Currently, the statutory rights of a liquidator or the Official Assignee to sue cannot be assigned or sold. Problems arise where the liquidator doesn’t have the funds to take action on the claim.

“If, for instance a liquidator has a claim against the directors of a company for reckless trading, but no funds to pursue it, this action would currently not proceed because that right to sue is not able to be transferred to another party with the means to sue. The Government’s decision, to allow the liquidator to assign the right to sue to another party mean, that in the future, court action could be pursued,” said Ms Harré.

Further issues remain to be resolved within the tier-two level of the review, including the possibility of implementing a business rehabilitation regime. The Ministry of Economic Development will release a public discussion document next month that canvasses the potential benefits and costs of introducing such a regime in New Zealand.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Zimbabwe: New Democracy, Or A False Dawn?

Gordon Campbell: Robert Mugabe = Hosni Mubarak. The current jubilation on the streets of Harare at the fall of Zimbabwe’s dictator Robert Mugabe is genuine, and one hates to be negative about the country’s future. Yet the situation is eerily similar to the scenes in Cairo in early 2011, when a popular uprising swept Hosni Mubarak from power in Egypt. More>>

 

Gordon Campbell: On The New Pike River Agency (And The Air Strike Wing)

Much of the sympathy the public still feels for the families of the Pike River miners has been sustained by the sense that the previous government – let alone the mining company and the processes of receivership and litigation – has never dealt honestly, or fairly, with them. More>>

ALSO:

Not Going Swimmingly: Contractor Cut, New Dates For Christchurch Sports Centre

“As an incoming Minister, I have been conducting a thorough review of progress on the Anchor projects and to learn of a $75 million budget blowout on this project was very disappointing..." More>>

ALSO:

Tertiary: Allowances, Loan Living Costs To Get Boost

“From 1 January, student allowance base rates and the maximum amount students can borrow for living costs will rise by a net $50 a week,” says Education Minister Chris Hipkins... further adjusted from 1 April 2018 in line with any increase in the CPI. More>>

ALSO:

Foreign Affairs: Patrick Gower Interviews Jacinda Ardern

Prime Minister Jacinda Ardern says discussions have already begun on how to bring climate change refugees into New Zealand under a Pacific seasonal employment plan... More>>

ALSO:

Gordon Campbell: On The Centre Right’s Love Of ‘Nanny State’

You’d almost think it was 2005 again. That was a time when the rugged individualists of the centre-right were being beset by government regulations on the nature of light-bulbs, the size of shower heads, the junk food available at school tuck shops and other such essentials... More>>

Speaking Of Transport: Public Engagement On Wellington Scenarios

“Our work on possible solutions for Wellington’s transport future is ongoing, but has progressed to the stage where we’re ready to share our ideas with the public and seek their feedback to help guide our next steps...” More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election