Government Consults On Stage Two Of Insolvency Law Review

The Ministry of Economic Development has kicked off public consultation on the second and final part of the government's review of insolvency law, Associate Commerce Minister Laila Harré announced today.

Consultation will be based on an advisory report prepared by the Law Commission entitled Promoting Trust and Confidence, and submissions are due by June 29 2001.

In May 1999 the Government agreed to a review of both personal and corporate insolvency, to be progressed in two tiers. Following consultation earlier this year, the Ministry of Economic Development is in the process of preparing final policy reccomendations on tier one.

Laila Harré says tier two issues deal with issues that are more fundamental to the structure and objectives of insolvency law, and are the focus of the Law Commission's report.

They are:

 The role of the state and enforcement mechanisms in insolvency proceedings
 Corporate rescue/voluntary administration procedures
 Statutory management
 Whether personal and corporate insolvency laws should be incorporated into a single statute

A questionnaire based on the Law Commission report has been produced for the consultation process, and is available on the Ministry of Economic Development website www.med.govt.nz/ri/insolvency/tiertwo/index.html or the Law Commission website, www.lawcom.govt.nz/insolv.htm.

All submissions will be collected by June 29, and its final advice on the issue is expected later this year.

Submissions should be sent to:

The Insolvency Review
Competition and Enterprise Branch
Ministry of Economic Development
PO Box 1473
WELLINGTON

or email martin.fowke@med.govt.nz

Findings from the first tier of consultation will be reported back to the Associate Minister late next month, This looked at phoenix companies, statutory preferences, cross border insolvency, voidable transactions and bankruptcy administration.

The Ministry will make a full set of recommendations on insolvency law to the government later this year.

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