Keay's insolvency: Personal and corporate law and practice (11th edition). By MichaelMurray, JasonHarris, Sydney: Thomson Reuters. 2022. pp. 1052. 181 AUD. ISBN: 978‐2‐4743‐2539‐4

Since the first edition was published in 1993, Keay's Insolvency has been an essential text for Australian insolvency practitioners and law students.1 The eleventh edition of the text, published in late 2022, provides a substantial revision that takes into account changes implemented in response to the COVID-19 financial crisis and the 2019 personal insolvency debt agreement reforms.2 This review first provides an overview of the structure of the text, and then provides an overview of select changes in the 11th edition. Following the same approach as past editions, Keay's Insolvency is divided into five parts. Part I, the introduction, only contains one chapter and provides a foundational framework while focusing on the underlying policies of insolvency law. The chapter, which is 41 pages long, provides a comprehensive overview of many issues that provide a foundation for those new to insolvency before delving further into the text. Personal bankruptcy is the subject of Part II, with six chapters ranging from the beginnings of the bankruptcy process (both voluntary and compulsory bankruptcy) to post bankruptcy in Chapter 7. Part III continues with personal insolvency by looking at arrangements outside of bankruptcy, including personal insolvency agreements (Chapter 8) and debt agreements (Chapter 9). After personal insolvency, Parts IV and V focus on corporate insolvency. Liquidation is the focus of Part IV (Chapters 10–17), with restructuring and receivership the focus of Part V (Chapters 18–21). This includes receivership (Chapter 18), voluntary administration (Chapter 19), deeds of company arrangement (Chapter 20) and restructuring and workouts (Chapter 21). The new edition is a necessary update addressing changes made in the wake of COVID, including updated monetary thresholds for notices and petitions, updates around personal insolvency including the 2019 Debt Agreement Reforms and 2021 Bankruptcy regulations and corporate insolvency changes. As this review cannot address all the changes, the next section will focus on issues of phoenix activity and the new small business restructuring regime, two areas that will be of interests to readers in many jurisdictions. In spite of claims that “[o]ne of the purposes of liquidation is to allow for an investigation of the affairs of the company”,3 aside from the investigation of potential claims the company may hold against officers, directors or other parties, it is unclear the extent to which investigation should be a goal of insolvency. This is especially true when the financial costs are born by the creditors. For example, where a director engaged in illegal activity but is personally insolvent, there may be a state interest in investigating the wrongdoing but the creditors cannot recover from an insolvent individual and therefore it is not in the company's interest to investigate. The reliance on private parties to investigate and the cost shifting from the state to creditors is an interesting characteristic of Australian insolvency law that may be of interest to other jurisdictions. As is a uniquely Australian focus on “phoenix” activity. Phoenix activity refers to the illegal practice of avoiding liability by transferring assets of a company to a new company without liabilities, leaving the old company without assets to sell for the benefit of creditors on a winding up.4 Due to the lack of assets that could be used to pay creditors, debtor companies rarely enter a liquidation procedure. Dishonest individuals may abuse this system to transfer assets to the detriment of creditors, which is a breach of directors' duties. However, attempts to prevent fraudulent activity may go too far and stifle entrepreneurship. For example, if an individual has a small company that requires a piece of specialised equipment, but the company falls on hard times and cannot pay its creditors, perhaps due to COVID or the illness of the managing director, the effort and expense in finding a second-hand buyer for the equipment may exceed the value obtained from selling it. If a couple of years later the same director starts a new company and attempts the use the same piece of equipment, they place themselves at risk. If the individual attempted to operate under the old company, they would place themselves at risk of liability for insolvent trading. In the absence of a low cost means of restructuring, the entrepreneur is effectively forced out of their trade unless they wish to risk civil and criminal liability. In addressing anti-phoenixing reforms and the policy objectives of personal and corporate insolvency, the text is an important resource, not only for Australia, but other jurisdictions seeking to strike a balance between encouraging entrepreneurship and protecting creditors. In 2021, like many jurisdictions in the wake of COVID, Australia introduced a new restructuring procedure for small businesses into the Corporations Act, meant to provide an alternative to voluntary administration as it is cost prohibitive for small businesses.5 This procedure, however, has been largely unutilised with less than 40 companies using the procedure between January 2021 and April 2022.6 The lack of utilisation is likely due to several factors including cost, a lack of incentive for directors to use the procedure and low threshold limits that disqualify companies, including a one million Australian dollar cap on company debts. Understanding these limits is also important for other jurisdictions exploring small business restructuring schemes. Threshold requirements, like ensuring employee retirement contributions are made before restructuring, may protect employees when the economy is strong, but when the economy is weak, these requirements will force small businesses into liquidation at a time when alternative employment may not be available. Understanding the regime is important for practitioners and learning from its shortcomings will be valuable for policymakers globally. The 11th edition of Keay's Insolvency continues its tradition of providing a comprehensive and authoritative guide for insolvency law in Australia. Its structure makes it a useful reference. For students, there does not appear to be a commercial study guide keyed to Keay's Insolvency. However, case books or other study guides may be used by students in tandem.7 As the precedents and technology continue to develop, future editions will benefit from discussions of current insolvencies involving digital assets,8 including cryptocurrency, and other fintech. With the spread of reforms in the insolvency sphere, Keay's Insolvency is at the edge of recent developments and an essential resource for anyone interested in Australian insolvency law.

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