ASBFEO sees ‘overwhelming’ response to Insolvency Practices Inquiry
The ASBFEO has seen an “overwhelming” public response to the Insolvency Practices Inquiry since it was launched two weeks ago.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has received 113 survey responses and a number of submissions in relation to its inquiry into insolvency practices and it expects that number to grow.
“While we are still in the early stages of the inquiry, it’s clear there’s a groundswell of public support for the work we are doing in this area,” said ASBFEO Kate Carnell.
Primarily, the Insolvency Practices Inquiry is expected to shine a light on the insolvency system and uncover if it encourages practitioners, in the first instance, to restructure the small or family business to turn it around.
“We will also look at the transparency and fairness of the current system.
“We know there is a very low success rate in restructuring Australian businesses under external administration and the impact of the insolvency process is often devastating for the small business owner,” said Ms Carnell.
She noted that a few small businesses that enter formal insolvency administration are able to navigate their way through the process to reach a restructuring agreement.
“We remain very keen to hear from small and family businesses that have faced financial difficulties and restructured or wound up their business,” said Ms Carnell.
“Many small businesses that have faced difficulties, felt they lost control of their business and in cases where the business was ultimately wound up, they felt the process was poorly managed.
“This inquiry will identify areas where practices can be improved. I will also recommend changes to the system to achieve a fairer outcome for all parties involved.”
An interim report will be released in December with a final report to be handed down in February.