730-422 Insolvency Law

Legal Method and Reasoning; Principles of Public Law; Torts; Legal Theory; Obligations; Contracts; Property or in each case their equivalents.

Corporations Law.

An insolvency regime is a necessary part of the legal system in a capitalist economy. That is because a means is needed for dealing with businesses that fail, and individuals who cannot pay their debts. An insolvency regime is required to ensure that in those circumstances the insufficiency of assets is equitably distributed amongst the creditors. To ensure equitable distribution, liquidators and trustees in bankruptcy are given powers to enforce claims to assets and undo past transactions.

Insolvencies often raise legal, practical and theoretical questions of considerable interest, which are by no means confined to a narrow concept of 'insolvency' itself.

This subject involves a practical and theoretical examination of the law of personal insolvency (i.e. bankruptcy), and corporate insolvency. The subject will concentrate on the law currently applicable in Australia. It will, though, touch on foreign and historical insolvency regimes where they throw light on the content, theory and operation of the Australian insolvency system.

The subject will cover the process for placing individuals and companies under the various forms of insolvency administration under the Bankruptcy Act 1966 and the Corporations Act 2001, and what happens when that is done. Because the law of insolvency principally exists to serve economic and social policy objectives, an examination of those objectives and the extent to which they are well served by the current law will be an important part of the subject.

Students will be expected to discuss why the law should be (or not be) as it is, at least as much as what the law is. They will also be expected to discuss what economic and social objectives should be served by the insolvency law, and what reforms might be desirable to make it serve them better than it does. It is hoped that students who complete this subject will have a fuller understanding of how the law serves policy objectives of Government and different interest groups in society.

Note: The essay in this subject is regarded as a substantial piece of legal writing for honours purposes.

A research assignment of 5000 words 100% (due end of semester) or a final examination three hours 100%.

Printed materials will be issued by the Faculty of Law.

• Act, Corporations. 2001.
• Keay and Murray, Insolvency: Personal and Corporate Law and Practice. Thomson/LBC, 5th ed., 2005.