Rehabilitation regime or corporate graveyard: practitioners’ perspectives of the Australian Part 5.3A Voluntary- Administration Legislation

Corporate restructure is pivotal to the efficient operation of Australia’s economy, including the ability for companies to respond to a dynamic macro environment and the productive utilisation of market capital. The ability of a distressed company to effectively and efficiently restructure has significant implications for stakeholders, employment, productivity, enterprise value and the community. The present research attempted to understand the ways in which the current insolvency framework - and in particular the Part 5.3A voluntary administration legislation - is experienced by experts in the field, with a view to identifying ways in which it may be developed. The methodological approach was a qualitative study utilising semi-structured interviews with 15 insolvency practitioners to gauge a deep understanding of the research questions. Findings indicated that there was broad based support for the effectiveness of the current legislative framework, however eight recommendations were drawn from the themes identified in the analysis to facilitate improved insolvency outcomes. These recommendations encompassed refinements to the existing legislation, reassessment of the policy and regulatory environment in which the legislation operates, and the broader development of a framework conducive to facilitating a corporate rescue culture. The present research reiterates the criticality of an effective corporate restructuring framework for the efficient operation of the Australian economy and to facilitate the rehabilitation of companies with viable underlying businesses as a matter of course.