The Federal Government plans to adopt an international model law on cross-border insolvency to speed up dealings between Australian and foreign courts.
The model, developed by the United Nations Commission on International Trade Law, is designed to overcome differences in legal systems between members countries and lead to faster and more efficient resolution of insolvencies.
The proposal is the centrepiece of CLERP 8, the latest chapter of the Government's sweeping Corporate Law Economic Review Program, released today.
"Administrators of companies, creditors, courts and other stakeholders face major difficulties in dealing with the consequences of cross-border insolvencies," the Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said.
"Better mechanisms will help promote greater legal certainty for trade and investment and fairer and more efficient administration. They will also help to maximise the value of a debtor's assets for the benefit of creditors and investors, increase the prospects of rescuing firms and help protect employment."
"Today's global business patterns bring new opportunities for Australia but also new risks. Adoption of this model law is a key aspect of the Government's work to build a sounder international framework to address those risks."
Senator Campbell said there was widespread support in the legal and accounting professions for the model. If adopted, it would become part of Australia's domestic law.
He said the paper would be open for comment until the end of the year.
Copies of the paper are available on the Treasury website, www.treasury.gov.au. Comments should be sent to the General Manager, Corporate Governance Division, Department of the Treasury, Langton Cresent, Parkes, ACT 2001.
CANBERRA
17 October 2002
Contact: Wayne Grant 02 62773955 / 0407 845280