RITANZ responds to Licensing delays

RITANZ has tirelessly advocated for the protection of creditors and licensing of insolvency practitioners over the years and were delighted when the government enacted the Insolvency Practitioners Regulation Act and the Insolvency Practitioners Regulation (Amendments) Act which was set to come into force and effect on 17 June 2020.

As a result of the COVID-19 lockdown the government rushed to introduce relief measures to keep businesses afloat and money flowing through the economy. RITANZ worked closely with MBIE and other stakeholders to drive the insolvency measures and provide tangible mechanisms and amendments to legislation to give directors of companies a toolkit to work with during these unprecedented times.

On 5 May 2020 the COVID-19 Response (Further Management Measures) Legislation Bill was introduced and had its First Reading in Parliament 8 May 2020. The Bill includes the proposed Safe Harbour and the Business Debt Hibernation amendments to the Companies Act 1993 which make up the backbone of this tool kit.  RITANZ prepared a written and oral submission for the Select Committee supporting the Safe Harbour provisions and Business Debt Hibernation regime but asking that any delay to implementing Insolvency Practitioner regulation be as short as possible, if needed at all.

Read more “RITANZ responds to Licensing delays”

COVID-19 Insolvency law relief: What’s in the Bill, and how to use it – an article by Bell Gully

The government has released the details of its proposed insolvency law relief package. The proposed changes will be welcomed by directors, many of whom are facing difficult choices about whether and how to continue to trade through the COVID-19 crisis.

The package forms part of the COVID-19 Response (Further Management Measures) Legislation Bill that was introduced yesterday afternoon. The Bill is expected to be progressed quickly, with Parliament’s Epidemic Response Committee expected to report on the Bill by next Tuesday, 12 May 2020.

The Bill is broad in scope and amends or modifies some 45 different pieces of legislation. In this update we focus on two of the proposed changes to the Companies Act 1993: relief from directors’ duties and a new business debt hibernation scheme. We then outline when and how directors might make use of them.

Directors’ duties relief

The Bill proposes significant, but temporary amendments to the two directors’ duties that apply specifically to insolvency scenarios:

  • the duty not to trade recklessly, and

  • the duty not to allow the company to incur obligations without a reasonable belief that they will be met when due.

Together, these duties protect the interests of the company’s existing creditors. They also protect the interests of new creditors that may arise from ongoing trading. Effectively, the duties prohibit directors from taking unreasonable business risks at the expense of creditors who will not be paid.

Read the full article here

Insolvency relief in sight for businesses affected by COVID-19

The Beehive has released the following press release today:

“Support is on the way for businesses facing insolvency due to COVID-19, with the Government introducing a package of measures in Parliament today to further boost New Zealand’s economic recovery.

“The Government is ensuring businesses affected by the economic impacts of COVID-19 can access the assistance they need to stay afloat as we get New Zealand moving again,” Minister of Finance Grant Robertson said.

Changes to insolvency and company law are progressing through the COVID-19 Response (Further Management Measures) Legislation Bill, which contains a range of measures to support business through the pandemic.

To read the full press release

View the Bill online

Hospitality insolvency – when the music stops

The hospitality industry is usually a good barometer of economic change; in times of prosperity, the champagne flows, but it is also one of the first industries to feel the pinch when the market turns south.

Prior to the Covid-19 lockdown, the sector was already facing some serious challenges, which should have been a warning sign for the wider economy. Now the impact of the pandemic will be monumental, and hospitality owners will need to make some difficult decisions if they are to weather the storm.

In recent years the increase in property values nationwide has led to significant rent, rates and OPEX rises; the Christchurch and Kaikoura earthquakes have raised insurance and building compliance costs, which landlords are looking to pass on to tenants; supplier costs have increased significantly; and despite many businesses urging the Government to defer the minimum wage rise, (from $17.70 per hour to $18.90 per hour), the increase came into effect on 1 April 2020 – another blow to business owners already facing huge financial hardship. Read more “Hospitality insolvency – when the music stops”

Guidance for NZ companies in financial distress

To help Chartered Accountants, the Restructuring Insolvency and Turnaround Association New Zealand (RITANZ) and Chartered Accountants ANZ have published this guide. It outlines some of the options available as part of the relief measures introduced by the New Zealand Government around insolvent trading laws in the Companies Act 1993. These include the temporary safe harbour protection and the business debt hibernation scheme.

The guide also highlights the importance of only dealing with an Accredited Insolvency Practitioner listed on the RITANZ or CA ANZ websites. Choosing the right person to assist your client in these difficult times is a critical decision. It is important that your clients are placed in the hands of an experienced practitioner, not just for themselves but also to ensure that you fulfil your own obligations as a professional advisor, particularly given the financial stress the clients may find themselves in.

The five page guide also outlines the next steps if the temporary relief options can’t save the business as well as support available for those affected emotionally.

RITANZ Guidance for New Zealand companies in financial distress

Covid-19 Further measures to support businesses

RITANZ, together with leaders in the industry has worked closely with MBIE to provide proposals to address certain corporate governance risks that now exist as a result of the Covid-19 pandemic and the Level 4 lockdown.

We have lobbied for urgent steps to be taken to both provide directors with some comfort that they will not be held liable for actions they take in this period as well as providing mechanisms to assist directors in the period following the lockdown as they attempt to rebuild their businesses.

We are pleased to share the following announcement made today by MBIE:

“The Government will be introducing legislation to make changes to the Companies Act to help companies facing insolvency due to COVID-19 to remain viable and keep New Zealanders in jobs.

The temporary changes include:
Read more “Covid-19 Further measures to support businesses”

RITANZ Networking Events postponed

RITANZ has been closely monitoring the evolving situation with the Coronavirus outbreak and is committed to protecting our members by complying with guidance received from the Ministry of Health at all times.

They have recommended “taking simple, common-sense steps to avoid close contact with other people as much as possible.” Their definition of close contact is “any situation where you have face-to-face contact closer than 2 metres for more than 15 minutes”. A number of our member firms are also implementing these sorts of restrictions on gatherings or non-essential meetings.

As our members safety is of the highest priority to us, we have taken the decision to postpone all RITANZ Networking Events until further notice. A decision on the Annual Conference will be made in the next 48 hours.

We are aware that our members rely on these events to meet their CPD requirements, stay abreast of industry events and build relationships with their colleagues.  Our commitment to meeting these needs does not change even in these difficult times and we will continue to ensure that other development and networking opportunities are created on an ongoing basis for our members to meet these requirements for 2020.

We appreciate your understanding of this difficult decision we have taken.

Wishing all our members good health over the next few months while we, as a community and nation, deal with this containment scenario as best possible.

Coronavirus update and RITANZ Events 15 Mar 2020

New Zealand Prime Minister Jacinda Ardern has announced that with effect from midnight 15 Mar 2020, every person arriving in NZ, including residents, citizens and tourists, will have to self isolate for a period of 14 days from the date of  their arrival into the country.

There will be a directive announced on mass gatherings during the course of the upcoming week.

RITANZ hosts monthly networking events in Auckland and quarterly meetings in Christchurch and Wellington. Our members health and safety is our highest priority and we are monitoring the Ministry of Health website daily for updates and guidance.

As part of measures to keep our members safe, we ask that you do not attend a RITANZ event if:

you have travelled outside of NZ within the last 14 days

you are exhibiting any symptoms that might indicate a Covid-19 infection

you suspect you may have been in contact with anyone who may have Covid-19

It is important to understand that this is infection can be transmitted in several ways:

By breathing in droplets coughed or exhaled by an infected person

By touching surfaces, objects, doorknobs etc that have been contaminated by droplets and then touching your face, mouth eyes etc.

Typical symptoms are a cough; a high temperature; shortness of breath and sometimes a sore throat.

Prevention is Better than Cure

RITANZ will supply hand sanitizer at all of our events and we ask that you use this both when entering and leaving the event.

We also encourage the following measures:

Maintaining a reasonable distance between attendees and restrict kissing, handshakes etc where possible.

Cover your nose and mouth when sneezing and dispose of used tissues immediately.

Wash your hands regularly and for a minimum of 20 seconds at a time

Sanitize hands and surfaces, doorknobs, lift buttons regularly.

Call Healthline on 0800 358 5453 if you have any symptoms or concerns.

We look forward to bringing these events to our members, where safely possible, as part of our commitment to your development and networking needs.

Resources available for updates:

Ministry of Health NZ

World Health Organisation

 

Flaws in Coalition’s insolvency law reform

Following the recommendations in the Insolvency Working Group’s (IWG) second paper in 2017, the government this week released details of further insolvency law reform being proposed for gift vouchers, voidable transactions, preferential employee claims and other changes to existing rules.
Additional discussion on new legislation dealing with ponzi schemes has been deferred for the time being.
The government has accepted many of the recommendations made by the IWG; the professional body for insolvency practitioners, RITANZ, believes most of these are both sensible and prudent. Our view on the key aspects of the changes are:

Read more “Flaws in Coalition’s insolvency law reform”

Aussie-style change proposes private insolvency practitioners

Political efforts to change insolvency law are taking inspiration from Australia.

Labour MP Raymond Huo is consulting with the private sector about a bill that would allow private sector insolvency practitioners to take the place of government-employed official assignees, inviting the private sector into a role that has previously been monopolised by the government.

Read more in the NBR