Over the last few months, we at HLB Insolvency, and I am sure many other businesses too, have learnt a great deal about the strengths of our technology platforms in the home workplace. Weekly team Zoom meetings are becoming the norm and are a great way to stay in touch ‘face to face’ and keep a sense of connection with our colleagues. We are pleased to see that so many industries are moving toward this type of flexible working environment.
In a quick response to social distancing rules COVID-19 has presented, a range of temporary changes were made to mandated insolvency procedures on 5 May 2020. We hope that these temporary concessions will lead to larger scale changes to the Corporations Act 2001 (“the Act”), promoting faster exchanges of information and more flexibility when it comes to largely outdated practices.
So what are the changes? And what do your clients need to know?
In the event that you, or a client, become involved in an insolvency matter, keep in mind the following matters that are in play at present and may become commonplace as we evolve beyond COVID-19.
- Meetings: while social distancing is still in place, meetings are now able to be held online by a variety of different technologies (i.e. Zoom or Microsoft Teams etc). Accordingly, those attending the meeting online are considered to be ‘present’ in achieving the requisite quorum at creditors meetings. Proxy holders can also be appointed and attend a virtual meeting via technology.
- Notices: a notice of meeting must provide details of how each participant can attend, participate and vote at a meeting. This includes proxy attendees. The Act has also been temporarily amended to give concessions for notices to be sent via email, instead of via Australia Post, which has faced many delays in service and other challenges over the last few months.
- Voting: a simple show of hands during COVID-19 is not sufficient and voting must be done by poll. Everyone who is entitled to vote must be given sufficient materials to properly consider the resolution ahead of the meeting.
- Execution of documents: a document can be executed without a common seal once it is signed by a company officer electronically or in physical form.
The online way of working and meeting is becoming the ‘new norm’ with these changes making the transition a lot easier and efficient. It will be interesting to see if any of these changes become more permanent and if they lead to updates to the Act in line with technology developments. It makes sense to be able to issue notices and information to creditors and other stakeholders about an insolvency administration via email – it was cheaper and vastly quicker. And taking time out of a busy day to travel to a creditors meeting may become a thing of the past as we learn more about the advantages of virtual meeting technologies.
About the author
Laura Jackson is a Insolvency File Support Officer at HLB Mann Judd Insolvency WA. Laura assists the Principal and Director with the many Corporate and Personal insolvency appointments managed by the HLB Insolvency team.
If you have any queries about insolvency matters, please feel free to contact the team on 08 9215 7900.