When a debtor company is wound up, creditors not only lose their debt but also the opportunity to investigate the circumstances if there are no funds to pay for an investigation.
ASIC is now able to fund liquidator actions to recover assets for creditors.
ASIC has updated its guidance on funding liquidator investigations and reports out of the Assetless Administration Fund. Regulatory Guide 109 Assetless Administration Fund: Funding criteria and guidelines (RG 109) explains ASIC’s approach to funding liquidators to report on potential misconduct by company officers in assetless administrations where fraudulent or unlawful phoenix activity is suspected.
The AA Fund finances preliminary investigations and reports into the failure of companies with few or no assets. The scope of the AA Fund has been expanded so that it may also provide funds to a liquidator to recover assets in certain circumstances.
The guidance outlines:
- the criteria for assistance from the AA Fund
- how to apply for funding
- ASIC’s approach to funding liquidator investigations, reports and actions
- what to include in a funded report to ASIC, and
- the liquidator’s rights to request a review of ASIC’s decision about funding.
