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Curbing the Phoenix Company
Terms of Reference
To inquire into and report to Parliament as to—
1.1. The adequacy of the existing disqualification procedures where company directors and persons acting in the management of companies have been involved in failed companies and in particular the adequacy of section 599 of the Corporations Law as a means of achieving creditor protection.
1.2. The adequacy of penalties imposed where disqualified persons act in the management of companies.
1.3. The adequacy of existing supervisory and enforcement arrangements in relation to disqualified persons.
2.1. Whether the Corporations Law provides appropriate remedies against directors and effective execution against directors' personal assets where those directors have been involved in the management of companies which have failed to meet financial obligations.
2.2. Whether the Corporations Law provides appropriate means of tracing, for the benefit of creditors, assets divested by company directors.
2.3. Whether the Supreme Court of Victoria and the Federal Court of Australia are appropriate forums for civil actions against directors (for instance under section 592 of the Corporations Law) having regard to the costs of such actions.
2.4. What other safeguards might be introduced to protect creditors in their dealings with companies.
3.1. The means by which Victoria might implement any recommendations arising out of this inquiry.
In the conduct of its reference, the committee should have regard to—
- The necessity to regulate the formation of new companies by persons who have been directors of or have been involved in the management of recently failed companies or companies unable to pay their debts;
- The measures that may be taken to control the participation of such persons, either as consultants or by any other form of employment or engagement, whether or not remunerated, in other newly created or existing companies by individuals related to them.
- Measures that may be taken to prevent companies and their operators from avoiding their liabilities by starting again under a new name.
Victoria Government Gazette, G1, 7 January 1993, pp. 53–54 (original terms of reference)
Victoria Government Gazette, G12, 25 March 1993, pp. 711–712 (amended terms of reference)
Victoria Government Gazette, G25, 1 July 1993, p. 1772 (extension of time to Autumn 1994 Session)