Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello MP)1 Outline
1.1. This is a Bill to amend the Corporations Act 2001 (the Corporations Act) to permit liquidators to reclaim unreasonable payments made to directors by companies prior to a liquidation.
1.2. The object of the Bill is to assist in the recovery of funds, assets and other property to companies in liquidation where payments or transfers of property to directors are unreasonable.
1.3. The amendments relate to transactions made to, on behalf of, or for the benefit of a director or close associate of a director. To fall within the scope of the amendments, the transaction must have been unreasonable, and entered into during the 4 years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred.