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appointment of an administrative receiver by a floating charge holder whose primary
duty is to safeguard rights of the charge holder and not to the unsecured creditors. 200
Following the developments in the UK, a similar reform took place in Australia in
1988. Among the recommendations made in the Harmer Report was the introduction
of new voluntary procedures for insolvent companies by the appointment of an
administrator. 201 The new voluntary procedures were the combination of voluntary
winding-up procedures and schemes of arrangement. 202 The Committee also
recommended the employment of creative alternatives to insolvency with the
objective of preserving the property and business of the company, if it was possible
and practical, while the creditors decided on the next course of action. 203
The recent Asian financial crisis in 1998 has spurred many Asian countries to
review their insolvency laws and as a result of that, some Asian countries adopted
sophisticated insolvency laws. 204 The impact of this event on New Zealand was that
all its major trading partners had insolvency laws which were more sophisticated,
and this had wider implications in terms of reciprocity issues and the international
reputation of its financial infrastructure. 205
Reviews of corporate and personal insolvency law began in May 1999 by the
Ministry of Economic Development. The introduction of new mechanisms, which
include rehabilitation of companies as one of its key reforms, reflects fundamental
policy changes in its insolvency law. Voluntary administration was introduced in
200 Ibid at [1-23].
201 ALRC R45 above n95 at [56].
202 Ibid, at [54].
203 Ibid, at [52-53].
204 David Brown Corporate Rescue, Report for the Ministry of Economic Development November
2000 at 7. .
205 Ibid.
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