Jones Partner

Phoenix Activity – Exposing Fraudulent Directors

26/07/2017 by Bruce Gleeson

Whilst it is difficult to accurately determine the true cost of “phoenix activity” primarily due to a lack of relevant data, it has been estimated to cost the Australian economy in the vicinity of $3.2 billion per annum. (1) What is phoenix activity? It essentially involves one company taking over the business of another company that is liquidated where the controllers of both companies are the same people or their associates. It is important to profile and understand phoenix activity to really understand how it needs to be deterred. In my opinion it is the illegal or “harmful phoenix activity” which has the most profound impact on the economy. Indeed in the rece

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Bankruptcy and Family Trusts – Are They Still Effective?

24/05/2017 by Bruce Gleeson

Family Trusts have and will continue to be used into the future for a variety of purposes, in particular asset protection. Most Family Trusts notably have a Corporate Trustee. As a Registered Bankruptcy Trustee, I am quite often asked by individuals who may be a Director/Shareholder of the Corporate Trustee and/or a Beneficiary of the Family Trust (or discretionary trust) what happens if the individual goes into bankruptcy (either voluntary [themselves] or involuntarily [via the Federal Court])? Ultimately it will significantly depend on the specific circumstances of each case and indeed the Trust Deed, but the Courts have for some time considered and will continue to exercise their minds

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Attitude & Corporate Insolvency Profiles 2016

23/01/2017 by Bruce Gleeson

One of my favourite Winston Churchill’s quotes is so relevant to directors and owners in Micro, Small and Medium Enterprises (“MSME”). That is: “attitude is a little thing that makes a big difference”. In December 2016, ASIC released its annual overview of corporate insolvencies based on statutory reports lodged by external administrators (i.e. predominantly voluntary administrators and liquidators) for the 2016 financial year (see ASIC website 16-436MR). Summarised in the table below are some key trends emerging from the collation of the data over the 2014, 2015 and 2016 financial years. Of particular note, is that MSME’s again dominate the corporate insolvency landscape. Whilst it is

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Directors Vulnerable to Untrustworthy Advisors

04/11/2016 by Bruce Gleeson

As both a Registered Liquidator and Registered Bankruptcy Trustee, I quite often hear about the plight of a family company director or individual who is in financial difficulty being seduced by unlicensed or unregistered supposed professionals (also referred to as pre-insolvency firms) about how best to deal with their difficult financial position, yet only to end in a worse position both financially and emotionally after taking such advice. Such seduction is akin to bait advertising that occurs both online and in other forms of media. It promotes a sense that everything will be sorted out and that the consequences will be very little. By advertising this way, it is effectively taking advan

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Turning ideas of insolvency around

17/10/2016 by Bruce Gleeson

Article as featured in the Acuity October 2016 CA Magazine – Aaron Watson   It’s time people understood the value insolvency professionals add to the economy, say industry representatives. “You weren’t allowed to be bankrupt or insane.” That’s how Brendon Gibson FCA describes a proposed register of New Zealand insolvency practitioners. A partner at KordaMentha since 2003, with insolvency experienced gained over two decades, Gibson is clear that this was not an appropriate way to regulate an increasingly important sector of the professional economy. Gibson is the chair of the Restructuring Insolvency and Turnaround Association of New Zealand (RITANZ), which represen

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Trading Places – Does It Really Work When a Company is Insolvent?

16/08/2016 by Bruce Gleeson

A talking point that I find is often raised by a director when their company is in financial difficulty and liquidation may be imminent is whether they should change directors. Let me be clear in explaining that the reason the current director is contemplating putting in their spouse or finding someone else as a director (both of whom may know very little about the business or importantly the financial position of the company) is about self preservation.Whilst it is not an unreasonable question to be posed, it is one that I find typically carries with it a lot of mis-information around the supposed benefits. Indeed, the 80’s movie (if you’re that old!!) called “Trading Places” springs

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Happy 50th Birthday – Bankruptcy Act

25/07/2016 by Bruce Gleeson

The month of July 2016 marks the 50th birthday since the Bankruptcy Act 1966 commenced. Much has happened over that period in terms of changes to Australia’s bankruptcy laws and whilst the writer was not even thought about when the Bankruptcy Act first commenced, in my time as an Insolvency Practitioner I have seen a few key trends / changes over the last 25 years: Personal Insolvency Agreements or PTX’s whilst being more frequently used options in the 90’s to deal with a debtor’s financial position have continued to be in steady decline since the 00’s and presently are few and far between. The more readily used option these days (circumstances permitting) seems to be a Sec

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Drive Thru Bankruptcies – Coming Soon to Australia

12/07/2016 by Bruce Gleeson

I hope this headline has got your interest! Yes Drive Thru Bankruptcies or more correctly put 1 year bankruptcy terms were announced as part of the (1) Productivity Commission’s Report to the Federal Government on 7 December 2015 that looked at key drivers of business set-ups, transfers and closures. This proposal and other changes were reforms announced as part of the National Science and Innovation Agenda by the Prime Minister and then the subject of a (2) Proposal Paper in April 2016. It has been expressed that Australia’s bankruptcy laws are overly punitive (when compared to other overseas jurisdictions) and that by reducing the current bankruptcy term from 3 years to 1 year that th

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To Credit Repair or Not? Time for Regulation!

08/02/2016 by Bruce Gleeson

A Report commissioned and released by ASIC’s Consumer Advisory Panel (“CAP”) in January 2016 titled “Paying to get out of debt or clear your record: the promise of debt management firms” makes a number of key findings/observations. Specifically, the Report labels firms that promise to help consumers (or individuals) in financial hardship or with listings of payment defaults on their credit reports as “debt management firms”. Typically these firms promise to help individuals by: – developing & maintaining budgets; – negotiating with creditors or debt collectors; – advising and arranging formal debt agreements under Part IV of the Bankruptcy Act 1966 [known as debt a

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SMEs – Are You Aiming to Thrive or Aiming to Survive! Key Challenges

22/11/2015 by Bruce Gleeson

As we approach the end of 2015 and SME owners hopefully take some time away from the day to day grind (yes please), attached below is an article that I wrote for the BiziNet Magazine November / December 2015 edition. SME owners should ask themselves as they reflect on the current year and importantly think about 2016 and beyond what their aim is! As my article explains, those that aim to thrive and have a dedicated plan (and resources) to do so are more likely to succeed than those that simply aim to survive. There are many reasons for this, but importantly it reflects on attitude.–online–journal/2015/11/06/smes-are-you-aiming-to-thrive-or-aiming-to-survi

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