Should Directors be Pursued for Insolvent Trading where a Company has Entered into a Deed of Company Arrangement?

11 Pages Posted: 18 Sep 2010 Last revised: 21 Sep 2010

See all articles by Colin J. Anderson

Colin J. Anderson

Queensland University of Technology - Faculty of Law

David S. Morrison

The University of Queensland - T.C. Beirne School of Law

Date Written: September 16, 2005

Abstract

This article examines the tension in Australia between the insolvent trading prohibition and the voluntary administration regime provided for in the Corporations Act. The tension exists since the former seeks to prosecute directors for incurring debts that the company cannot pay whereas the latter provisions seek to allow a company in financial distress to resolve the means of dealing with financial difficulty with its creditors and move forward on an agreed basis. The case of John Elliott is the first case in Australian corporate law history concerning the relevant provisions where an agreement was made with creditors, after which the director was prosecuted pursuant to the insolvent trading prohibition.

Keywords: insolvency, bankruptcy, insolvent trading, S588G

JEL Classification: K22

Suggested Citation

Anderson, Colin J. and Morrison, David S., Should Directors be Pursued for Insolvent Trading where a Company has Entered into a Deed of Company Arrangement? (September 16, 2005). Insolvency Law Journal, Vol. 13, 2005, University of Queensland TC Beirne School of Law Research Paper No. 10-34, Available at SSRN: https://ssrn.com/abstract=1678078 or http://dx.doi.org/10.2139/ssrn.1678078

Colin J. Anderson

Queensland University of Technology - Faculty of Law ( email )

Level 4, C Block Gardens Point
2 George St
Brisbane, QLD 4000
Australia
+61 7 3138 1099 (Phone)
+61 7 3138 2121 (Fax)

David S. Morrison (Contact Author)

The University of Queensland - T.C. Beirne School of Law ( email )

The University of Queensland
St Lucia
4072 Brisbane, Queensland 4072
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
230
Abstract Views
1,342
rank
183,923
PlumX Metrics