Would the scope of the Model Law cover insolvency of corporations and natural persons?
The focus of the Model Law is squarely on business debtors. The guide to enactment mentions that enacting States may wish to exclude from the scope of the cross-border provisions consumer debtors (or non-traders). In Australia, there is no obvious legal barrier in terms of insolvency law applicable to traders and non-traders – rather, on the one hand, corporate insolvency is dealt with under the Corporations Act, while personal bankruptcy of natural persons is dealt with under the Bankruptcy Act. Should that distinction be retained under the Model Law, so it only applies to corporate insolvency proceedings, or should it be extended to some (or all) personal bankruptcies also? On one hand, applying the cross-border provisions only to corporate insolvencies could be justified on the basis that Australian businesses with an international dimension are very likely to involve corporations. Use of the provisions against Australian consumer debtors could be controversial, and Australia’s lega
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