The Government has agreed to a number of changes to insolvency law, publishing a Cabinet paper outlining proposed reforms based on recommendations made in a May 2017 report from the Insolvency Review Working Group.

CCNZ made a submission on these reforms in 2017, also mobilising the civil construction industry to take on high-profile cases where contractors had payments received from insolvent companies reclaimed by liquidators. Despite slow progress on legislative change, it seems reforms to legislation may be introduced next year.

The current law means payments received by a contractor can be subject to claw back for up to two years, which creates massive uncertainty and inhibits business confidence and development.

CCNZ supports the proposed changes. Of particular interest for contractors will be changes to shorten the ‘clawback’ period during which liquidators can claw back payments from unrelated creditors to six months and extending the period for related creditors to four years. This process currently creates uncertainty and inhibits business confidence and development.