MDW Associates director Graeme Downie has applauded changes to the Bankruptcy Act that give businesses more time to consider their financial circumstances.
Under changes to the act, the stay period for declarations of intent to file a debtor’s petition will change from seven to 21 days.
Critics argue the new timeframe is too long but Downie highlights the time is necessary to allow businesses to assess their options and initiate turnaround under the Corporations Act.
“Some stakeholders have expressed concern that an increase in the stay period to 21 days would be excessive and that such an increase may prejudice the rights and interests of creditors,” says Downie.
“But we believe putting companies hastily into administration without giving them a decent chance to turnaround serves no one’s interests – the owners, creditors, shareholders or clients.
“My partners and I believe increasing the timeframe would provide company directors with a much more realistic opportunity to properly make their assessments.”
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