Final report on inquiry into corporate insolvency in Australia – Highlights and what’s next

The team at Gilbert + Tobin indicate their support for the recommendation that any potential insolvency reform should ensure that section 561 of the Act does not override section 556, as it may lead to arbitrary and unfair outcomes in circumstances where a secured creditor has a circulating security interest at the commencement of the winding up and it later transpires that there are insufficient assets to pay preferred creditors.

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