Directing the Sinking Ship - Where to From Here

In New Zealand the provisions relating to "reckless trading" have long-been subject to criticism. In 2021 the Court of Appeal in Yan v Mainzeal Property and Construction Ltd called for the law to be reviewed to ensure it provides a "coherent and practically workable regime" for the protection of creditors of insolvent or near-insolvent companies. This article discusses the controversy surrounding ss 135, 136 and 301 of the Companies Act 1993 (NZ). It then suggests a series of amendments in response to the Court of Appeal's call for change. The article was the winning paper in the Banking and Financial Services Law Association's 2021 Research Essay Prize