People,

Same again, for the tabloid, but note they don't run long letters.

Sir,

John Howard may be expressing support for families, but the current
Insolvency Laws are leaving many families in the ditch, unpaid and
unable to make use of the Government scheme to pay out workers in
failed companies.

Insolvency law is meant to deal with the situation where a company (or
individual) runs out of cash, and should be an attempt to deal with it
in the fairest way possible, without the process costing too much.

Australian insolvency law is far from that ideal. There is enormous
scope for unfair behaviour, and it costs far too much to run the
process of an insolvency.

I was made redundant from a software development company along with
nearly 100 others, with the company unable to pay the redundancy or
wage payouts. I would have accepted the result if the Administrators
had liquidated the company, distributed the assets to the creditors,
and sent us all home. After all, there is only a fixed amount of
assets available; or is there?

Instead, the Administrators decided to trade out and used a stunning
array of legal tricks to limit the amount we were paid, and to make it
much more difficult for us to exercise our rights. They exploited a
loophole in the Corporations Law, giving us important information only
one day prior to a meeting, where the law requires five days' notice.
When they found extra investment funding, they used an unusual legal
trick to make it very difficult for creditors to vote on receiving
extra benefit from the extra funding.

Their legal tricks also violated the policy of the Government payout
scheme (known as GEERS), which meant that they refused our claim.

The end result, now, is that the employees and creditors have been
paid less than half, and the company is now free to become a runaway
success, with no further obligations to these creditors.

The other end result is 100 families unwilling to vote for Howard,
unless he changes the insolvency laws to improve vague definitions,
remove the opportunities for unfair behavour, and to implement a
simple concept: if the company keeps going, creditors get paid in full.

Nicholas Bishop, Vermont South
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(contact details).