When the going gets tough, the trans-Tasman get together

Australia and New Zealand will work together to improve cross-border insolvency arrangements in light of the global financial crisis.

Senator Nick Sherry, the Minister for Superannuation and Corporate Law, met with Simon Power, New Zealand Minister of Commerce, in Canberra today, where the pair agreed to align the insolvency laws of the two countries.

Sherry and Power said this move would be in the interest of creditors on both sides of the Tasman, with the current crisis meaning there was “likely to be more companies with interests on both sides of the Tasman under financial distress”.

The statement from the ministers said the new framework would aim to avoid the complexities and costs associated with multiple insolvency proceedings across the countries.

There will now be an examination of the insolvency regimes of both countries, including the information gathering process, the securing and realisation of property and attempts at corporate reorganisation.

There will also be efforts to improve dispute resolution procedures and address any regulatory gaps, the ministers said.

Both countries have in place existing cross-border insolvency acts, and it’s anticipated that any possible reforms would work without “altering the underlying operation of our respective regimes”, Power said.