Insolvency Review Working Group
The Insolvency Review Working Group was a panel of experts set up in November 2015 to examine aspects of corporate insolvency law.
The Insolvency Review Working Group (Working Group) looked at:
- voluntary liquidations including phoenix companies
- voidable transactions including Ponzi schemes
- the regulation of insolvency practitioners.
It also had a mandate to examine other areas of potential reform in this area.
Working Group's 2 reports
The Working Group produced 2 reports which made recommendations on potential changes to New Zealand's insolvency law.
Consultation on Group's reports
In 2016, we consulted on the recommendations in the Group's first report. Submissions closed on 7 October 2016 and a total of 29 submissions were received.
In 2017, we consulted on the recommendations contained in the Group’s second report and on an outstanding recommendation from its first report ie, whether to introduce a director identification number. Submissions closed on 23 June 2017 and a total of 34 submissions were received.
Changes to insolvency law
In September 2019, Cabinet agreed to a number of changes to insolvency law, including:
- providing better consumer protection for people with gift cards or vouchers purchased from retailers who go into receivership
- ensuring that the protection for wages owed to employees of failed businesses is broadened to cover entitlements to long service leave and payments in lieu of notice
- reducing the period during which unrelated party creditors can be required to pay back amounts they received from a business being liquidated from two years to six months
- better protection for creditors by extending the claw-back period from two to four years where the payment was made by the failed company to a related-party creditor, e.g. a payment to the spouse of a director of the company.
Most of these changes were recommended by the Insolvency Working Group in its 2017 report, and will be included in a future Insolvency Law Reform Bill.