Written by Schon Condon in September, 2009

It would certainly be fair to say that at the time of writing this that the profession is probably in frustrated agreement that the ‘Great Insolvency Boom of 2009’ has not yet occurred. While many in the community seem to think that the insolvency profession is flat out, the reality is that while there has been an increase in activity, it is nowhere near the levels that some pundits both predicted and desired.

In February of this year during a presentation for the Commonwealth Bank I predicted that the economy would click into recovery mode by the middle of the 2010. A point that was hotly contested by some members of the audience who believed we were only at the beginning of a very long haul.

While that remains my view I do acknowledge the feedback from many that have travelled overseas and have returned to report significant states of despair in both Europe and North America.

If I believe those who are more qualified than me, then it appears some are predicting another correction in the market before the end of this year, probably around October. Albeit this view is shared by myself, I must acknowledge that there is however great debate about the magnitude of such a correction. Notwithstanding this, my belief is still that the economy will be far more confident by the middle of next year and we will be seeing genuine light at the end of the tunnel. I do however think that it will be a slow and steady improvement rather than a radical change overnight.

With this in mind, I have been very interested in the recent announcement by the Attorney General regarding proposed changes to the Bankruptcy Act. The detail of these changes are dealt with in greater detail later in this issue, but one of the positive considerations is that there appears to be an attempt to relate the costs of the process with ability for the process to be employed.

Whether this is simply being done to manage statistics or with a genuine interest in the process it will have the same effect and will assist with future modifications to the whole of the insolvency processes.

There needs to be a focus on the recovery of assets, claims and value, and an adequate investigation for the benefit of public interest where action will actually result in the ultimate preservation of value for all of the stakeholders involved.

There has obviously been genuine concern raised at various levels as to the extent that costs have risen to on a number of matters and this alone has also been suggested to be one of the reasons that appointments are not at the anticipated height.

As we leave the GFC we must not simply rejoice in the renewed levels of confidence and prosperity as we enter the “FEB”. We need to take the time to analyse what worked and what didn’t and promote legislative change. Change that will genuinely assist in the preservation of stakeholder values and the prompt and cost efficient method of returning businesses and individuals to prosperity – for the overall benefit of the community as a whole.