Australia to overhaul bankruptcy laws to help firms over COVID-19

The changes aim to move the system "from a rigid, one-size-fits-all creditor in possession model to a more flexible debtor in possession model," Federal Treasurer Josh Frydenberg (pic) said in a statement.

SYDNEY: Australia on Thursday unveiled its biggest shakeup in bankruptcy laws in nearly three decades, allowing businesses to trade while insolvent and take more control over debt restructuring, in a bid to help firms through the coronavirus crisis.

Under the proposed rule changes, businesses with liabilities of less than A$1 million ($708,000) will be able to keep operating while they come up with a debt restructuring plan, rather than be placed in the hands of administrators.