In response to the COVID 19 pandemic the Federal Government introduced amendments to Safe Harbour provisions in the Corporations Act 2001 to provide temporary relief for directors in relation to personal liability for insolvent trading. These new provisions apply to debts incurred by a company ‘in the ordinary course of business’ for a period of 6 months, commencing on 25th March 2020.
This and other support measures such as Job Keeper, have undoubtedly saved many businesses from going under in recent months. However, there is real concern that the insolvency flood gates may open as we approach the September deadline for the termination of the temporary protections. The Federal Government has some important decisions to make about whether to extend its support packages and has recently expressed an intention to extend that support in some form. In the meantime, every director, advisor or key stakeholder to a business adversely impacted by COVID-19 and reliant on these measures, should be acting to protect the business.
It can take anywhere between weeks and months to become Safe Harbour compliant, so it’s critical to start the process well ahead of time and before the temporary protections lapse. There are some common misconceptions about Safe Harbour and how it operates, which are hindering its use.
Join Coleman Greig’s insolvency law expert Tim McGrath, along with Michael Fingland and Macaire Bromley from turnaround specialists Vantage Performance, for this practical webinar drawing on case studies and common traps, and providing tips, to alleviate the misconceptions and to ensure that the Safe Harbour process that you put in place now, protects you and your company into the future.