18 May 2021 - In Australia, a new simplified liquidation process was introduced on 1 January 2021. To summarise, the simplified liquidation is a streamlined creditors’ voluntary winding up for companies that have liabilities less than $1 million and it only applies when the event that triggers the start of the winding up occurs on or after 1 January 2021.
The key features of simplified liquidation are as follows:
- It allows the use of technology in voting and information distribution.
- There is no obligation to hold creditors’ meetings and the ability to form Committees of Inspection.
- There are reduced circumstances in which unfair preference and voidable transaction claims may be pursued, with the period shortened from six to three months and a new threshold of more than $30,000 introduced.
- The liquidator does not have an obligation to provide a report on offences to ASIC, unless, in the opinion of the liquidator, there are reasonable grounds to believe that misconduct has occurred.