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Insolvency law reforms in Australia – safe harbour and stay on ipso facto clauses

On 18 September 2017, the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) (Treasury Laws Amendment Act) received Royal Assent.  The Treasury Laws Amendment Act creates major changes to Australia’s insolvency law regime by introducing:

  • a “safe harbour” for company directors to avoid contravening the insolvent trading provision in the Corporations Act 2001 (Corporations Act); and

  • provisions making “ipso facto” clauses unenforceable while a company is undergoing specified restructuring or other arrangements aimed at avoiding being wound-up in insolvency.

The new safe harbour provisions came into effect on 19 September 2017 and the changes to the ipso facto laws are expected to come into effect on 30 June 2018.

Bingo Industries completes 3 acquisitions in Victoria

Sierra Legal would like to congratulate Bingo Industries Limited (ASX: BIN) on its entry into the Victoria waste management market through the acquisition of Konstruct Recycling, Resource Recovery Victoria and AAZ Recycling.

Sierra Legal assisted Bingo with all legal aspects of the transaction, including:

·         Legal due diligence;

·         Drafting and negotiating transaction documents; and

·         Assistance with completing the transactions.

The combined deal consideration across the 3 acquisitions was approximately $38 million.

For further information, please contact Craig Sanford, Michael Jeffery or Jenny Lau.

Equity crowd-sourced funding in Australia

In late 2016, the Australian Federal Government introduced into parliament, the Corporations Amendment (Crowd-sourced Funding) Bill 2016 (Cth) (the CSF Bill). The CSF Bill will amend the Corporations Act, and will establish a regime for equity crowd-sourced funding for certain ‘eligible’ Australian companies (the CSF Regime). The CSF Bill recently passed through both the Australian Federal House of Representatives and the Australian Senate, and will now be presented to the Governor-General for assent.

The CSF Bill is intended to remove the regulatory barriers to equity crowd-sourced funding and to therefore make available a new funding source for business in Australia. It also introduces to all Australians a form of investment that has previously only been available to sophisticated investors.