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The treatment of employee priority in a deed of company arrangement

Anderson, Colin (2009) The treatment of employee priority in a deed of company arrangement. Insolvency Law Journal, 17(3), pp. 147-156.

Abstract

This article examines one of the changes implemented in the Corporations Amendment (Insolvency) Act 2007 (Cth) . It is argued that the insertion of s 444DA raises some matters that go to the nature of the insolvency process generally and the operation of Pt 5.3A in a particular. The position of employees in insolvency is a matter that is the subject of much comment from a policy perspective. This article does not cover that debate but provides some initial explanation of the need to protect employees. The second part of the article covers the particular background to the voluntary administration system as far as employee rights are concerned as well as the arguments put forward by the government to justify the change in the legislation which inserted s 444DA . It suggests that there was little evidence provided for the need to protect employee priority rights in this particular way. An alternative explanation is given for the change adopted by the government. The third part of the article suggests that the manner in which the legislation seeks to better protect employee creditors is somewhat clumsy in its operation. It raises a number of questions about how the legislation may operate and argues that given the stated aims, some alteration to it would improve its effectiveness.

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ID Code: 43285
Item Type: Journal Article
Keywords: Corporations, Insolvency Law, Voluntary Administration, Deed of Company Arrangement
ISSN: 1039-3293
Subjects: Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100)
Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Corporations and Associations Law (180109)
Divisions: Current > QUT Faculties and Divisions > Faculty of Law
Current > Schools > School of Law
Deposited On: 13 Jul 2011 23:11
Last Modified: 03 Dec 2012 12:07

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