As part of its economic response to the 2019 novel coronavirus disease (COVID-19), the federal government has passed a "temporary safe harbour" insolvency measure. It suspends (for six months, if not extended) the current "insolvent trading" regime whereby directors can be personally liable for debts incurred by their company at a time it is insolvent.
This article explains the key considerations for directors under the new temporary rules. It also discusses the possibility that if used wisely, the increased flexibility they allow will prove a more effective way for companies and creditors alike to navigate financial distress in the future.