insolvency admin. and changes?

PRE-PACK INSOLVENCY ADMINISTRATIONS
Senator WILLIAMS: Is there anything else you would like to see? I agree with your pre-packs, by the way. I think that is something to really look at closely. I have done a lot of work with some liquidators about pre-packs to save the cost and return more money to their creditors; that is what it is all about.

Mr Lombe: It usually stops that destruction of value. Often you have got businesses with complex arrangements—leases, agreements, licensing and all that sort of stuff. As soon as you have an event of insolvency, they are void; they can be terminated. That is the difficulty in restructuring a business.

Senator WILLIAMS: The assets sold way below their value.

Mr Lombe: That can be the outcome. Often the reason that occurs is that you have had a destruction of value by the existing directors; they have traded the business down. By the time the liquidator, the voluntary administrator or the receiver gets appointed, the business has been seriously impacted by the trading.

10. WHAT CHANGES IN THE LAW WOULD HELP ASIC PERFORM BETTER?
Senator WILLIAMS: If you were in charge of Australia for one day, what changes would you make to our Corporations Law so that ASIC can perform their job better?

Mr Lombe: I would be trying to give ASIC some more resources, or have resources shifted, so that ASIC can focus on some of those key investigated aspects that I have been talking about today.