University of Technology Sydney

76115 Insolvency

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2025 is available in the Archives.

UTS: Law
Credit points: 6 cp
Result type: Grade and marks

Requisite(s): 70417 Corporate Law OR 70327 Introduction to Property and Commercial Law
These requisites may not apply to students in certain courses. See access conditions.

Description

This subject provides an introduction to the administration and regulation of insolvent individuals and corporations. The subject aims to examine insolvency within the social context and impact of insolvency law. Students examine the legal procedures involved in insolvency law (such as winding up applications, lodging proofs of debt and distribution of insolvent estates) as well as the impact of insolvency on stakeholders such as employees, unsecured creditors, and individual and corporate debtors. Both individual and corporate insolvency are examined. All aspects of personal and corporate insolvency are studied but the subject places particular emphasis on examining the powers of insolvency administrators, voluntary administration, liquidation and the rights of creditors.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:

1. Demonstrate the ability to correctly apply relevant insolvency laws to a range of common commercial situations involving all forms of business structures by providing written and verbal advice;
2. Critically assess and synthesise the range of commercial and legal issues that arise during times of financial difficulty;
3. Efficiently and effectively identify and apply electronic and paper-based research strategies to inform and facilitate the formulation of sound oral and written legal arguments for clients;
4. Effectively balance and synthesise the competing interests of different stakeholders involved in an insolvent estate.

Course intended learning outcomes (CILOs)

This subject also contributes specifically to the development of the following graduate attributes which reflect the course intended learning outcomes:

  • Legal Knowledge
    A coherent understanding of fundamental areas of legal knowledge including:
    a. The Australian colonial and post-colonial legal system, international and comparative contexts, theoretical and technical knowledge;
    b. The broader contexts within which legal issues arise and the law operates including cultural awareness, social justice and policy;
    c. The impact of Anglo-Australian laws on Indigenous peoples, including their historical origins in the process of colonisation and ongoing impact; and
    d. The principles and values of justice and ethical practices in lawyers' roles. (LAW.1.1)
  • Critical Analysis and Evaluation
    A capacity to think critically, strategically and creatively, including the ability to:
    a. Identify and articulate legal issues in context, including the skill of critical reading and writing;
    b. Apply reasoning and research to generate appropriate responses;
    c. Engage in critical analysis and make a reasoned choice amongst alternatives; and
    d. Think creatively in approaching legal issues and generating appropriate responses. (LAW.3.1)
  • Communication
    Effective and appropriate communication skills including:
    a. Highly effective use of the English language to convey legal ideas and views to different and diverse audiences and environments;
    b. An ability to communicate to inform, analyse, report and persuade;
    c. An ability to strategically select an appropriate medium and message;
    d. An ability to assess how messages are received and alter communication strategies accordingly; and
    e. An ability to be responsive and adaptive to the perspectives of collaborators, clients, counter parties and others. (LAW.5.1)
  • Collaboration
    Effective and appropriate collaboration skills in working together to achieve a common goal in a group learning environment or the workplace including:
    a. An ability to give and receive feedback;
    b. Appropriate professional and interpersonal skills in working collaboratively;
    c. A capacity to develop strategies to successfully negotiate group challenges; and
    d. An ability to be responsive and adaptive to the perspectives of collaborators, clients, counter parties and others. (LAW.6.1)

Teaching and learning strategies

Strategy 1: Class preparation involving pre-class podcasts, required reading and problem questions

Each week’s topic will involve one or more pre-class podcasts that will go for no more than 30 minutes. The podcasts will cover foundational content that students need to understand before engaging in group activities in class and online. The podcasts will be uploaded to Canvas at least one week prior to each class. As these podcasts provide a framework for understanding foundational concepts in this course, it is essential students complete these podcasts prior to attempting the required reading and set problem questions (available on Canvas) for the following class.

This subject promotes student-centered learning in order to assist in the development of information literacy and analytical skills relevant to the practice of insolvency law. This aim will be achieved by requiring students to engage with the topics presented in the subject through independent research (usually on the internet) as part of the required weekly readings. This material will include commercial considerations and practical processes that are relevant to the application of insolvency law principles to a variety of practical situations.

It is expected that students will have completed the required readings and attempted the sample questions in the subject outline in advance of each class. This subject is worth 6 credit points, which means you should be spending on average 9 hours per week working on this subject (including attending class).

Strategy 2: Collaborative learning

Each class will involve small and large group discussions based on topical issues raised by the reading material and podcasts for that week. These discussions will include at least one hypothetical problem scenario that will simulate a legal advice session where students will advise the client of their legal position and offer advice that is legally sound and commercially appropriate for the client’s situation.

Strategy 3: Online Activities and Discussion

The subject will involve discussion forums on Canvas for students to discuss matters raised each week. The discussion forums will be monitored by staff. This activity will enable students to monitor and deepen their understanding of legal issues and will also provide feedback from staff and fellow students.

Strategy 4: Feedback

Students will receive cumulative feedback by completing regular online quizzes with feedback provided for each correct and incorrect answer. Students will also receive formative feedback through discussions with staff and students on the online discussion forum. Students will receive written feedback from the lecturer for written pieces of assessment.

Subject Delivery

There is one class lasting two and half hours each week, together with one or more short podcasts lasting no longer than 30 minutes in total. All required and supplementary reading is made available on Canvas.

Content (topics)

  • Overview of corporate and personal insolvency procedures and judicial/regulatory framework
  • Liquidation
  • Bankruptcy
  • Voluntary administration
  • Deeds of company arrangement
  • Receivership

  • Insolvency and trusts

Assessment

Assessment task 1: Class Participation

Objective(s):

This task addresses the following subject learning objectives:

1, 3 and 4

This task contributes specifically to the development of the following graduate attributes:

LAW.1.1, LAW.5.1 and LAW.6.1

Weight: 20%
Criteria:

Ongoing throughout session:

  • demonstrated preparation for tutorials through review of relevant preparatory resources
  • consistent and active participation in tutorial activities throughout the semester
  • quality of contributions to class discussions and activities throughout the semester
  • active collaboration with peers throughout the semester in discussion and problem solving exercises
  • reflection upon competing arguments and perspectives of relevant stakeholders.

Assessment task 2: Research essay

Objective(s):

This task addresses the following subject learning objectives:

1, 2, 3 and 4

This task contributes specifically to the development of the following graduate attributes:

LAW.1.1, LAW.3.1 and LAW.6.1

Weight: 30%
Length:

1,900 words (+/- 10%) not including footnotes. Footnotes must be used for referencing/citation purposes and not for substantive discussion or analysis.
Criteria:

The marks will be based on:

  • Directly addressing the question and demonstrating an ability to interpret, distil and explain high quality primary and secondary sources (such as legislation, cases, parliamentary and departmental reports, and scholarly writing);
  • Evidence of high-quality research which uses references in addition to the required reading for the topics;
  • Coherent and logical analysis of the legal, commercial and policy issues;
  • Justifiable and persuasive argument that demonstrates creative thinking about the issues;
  • Clear and concise written expression with correct use of grammar and spelling;
  • Referencing complies with the Australian Guide to Legal Citation 3rd edition.

Assessment task 3: Final exam

Objective(s):

This task addresses the following subject learning objectives:

1, 2 and 4

This task contributes specifically to the development of the following graduate attributes:

LAW.1.1, LAW.3.1, LAW.5.1 and LAW.6.1

Weight: 50%
Length:

2,000 words (equivalent)
Criteria:
  • Identification of relevant legal and commercial issues;
  • Correct application of legal principles to the facts of the question;
  • Capacity to appropriately balance competing legal and commercial issues faced by stakeholders in the hypothetical scenario.

Required texts

  • Michael Murray and Jason Harris, Keay’s Insolvency (Lawbook Co, 11th ed, 2022). This text book is indispensable for your study in this subject and earlier editions cannot be used due to major law reform in 2017 (principally the Insolvency Law Reform Act 2016 (Cth)).

Legislation: You will also need to have access to up-to-date copies of the Corporations Act 2001 (Cth) (and regulations) and the Insolvency Practice Rules (Corporations) 2016 (Cth). Each of Butterworths, CCH and Lawbook Co publish an edition for students:

  • CCH, Australian Corporations and Securities Legislation 2018 (just the legislation with no annotations);
  • LexisNexis Butterworths, Australian Corporations Legislation 2018 (select the practitioner edition which has annotations); and
  • Thomson Lawbook, Corporations Legislation 2018 (with annual review and annotations (Edmund Finnane)).

You will also need access to the Bankruptcy Act 1966 (Cth) (and regulations) and the Insolvency Practice Rules (Bankruptcy) 2016 (Cth). CCH publishes a hard copy of the Act, and LexisNexis Butterworths publishes an annotated version of the Act.

Alternatively, you can access current versions of all the above legislation on the Federal Register of Legislation or AustLII.

Recommended texts

Books

  • Harris, Gronow and Anderson, Insolvency Law: Commentary and Materials (2014, Thomsonreuters)
  • Symes C and Duns J, Australian Insolvency Law (3rd ed, 2015, LexisNexis Butterworths)
  • Brown D, Symes C and Wellard M, Australian Insolvency Law: Cases and Materials (2015, LexisNexis Butterworths)
  • Finch V and Millman D, Insolvency Law (3nd ed, 2017, Cambridge Uni Press-UK law)
  • Goode R, Principles of Corporate Insolvency Law (4th ed, 2011, Sweet and Maxwell-UK law)
  • Jackson T, The Logic and Limits of Bankruptcy Law (Harvard Uni Press, 1986-US law)

Journals

  • Australian Restructuring Insolvency & Turnaround Association Journal (formerly Australian Insolvency Journal) (available on Australian Public Affairs Informit database)
  • Company and Securities Law Journal (Westlaw AU)
  • Insolvency Law Journal (Westlaw AU)
  • Insolvency Law Bulletin (LexisNexis AU)
  • Journal of Banking and Finance Law and Practice (Westlaw AU)

Overseas Journals

  • American Bankruptcy Institute Law Review (HeinOnline-US law)
  • Business Lawyer (LexisNexis-US law)
  • Company Lawyer (Westlaw UK)
  • Insolvency Institute of Canada (Thomsonreuters Westlaw-Canadian law)
  • Insolvency Intelligence (Westlaw UK)

Government Reports

  • Productivity Commission, Business Set-up, Transfer and Closure (September 2015), http://www.pc.gov.au
  • CAMAC, Report on Rehabilitating Large and Complex Enterprises in Financial Difficulties (October 2004) http://www.camac.gov.au
  • Federal Parliamentary Joint Committee on Corporations and Financial Services, Corporate Insolvency Laws: a Stocktake (June 2004).
  • The Harmer Report, Australian Law Reform Commission, General Insolvency Inquiry, Report number 45, 1988, AGPS, Canberra

Specialist works

  • Anderson and Morrison, Crutchfield’s Voluntary Administration (Westlaw AU)
  • Bigmore (ed), Bankruptcy Law and Practice (LexisNexis AU) (co-written by J Johnson)
  • Ferrier Hodgson, Australian Insolvency Management Practice (CCH Intelliconnect)
  • Gronow, McPherson’s Law of Company Liquidation (Westlaw Au)
  • Keay, Avoidance Provisions in Insolvency Law (1997, Lawbook Co)
  • McQuade and Gronow, Australian Bankruptcy Law and Practice (Westlaw AU)
  • O'Donovan, Company Receivers and Administrators (Westlaw AU)

Useful Websites