Update on Statu­to­ry Demands – changes to min­i­mum thresh­old and (for some) time to comply

On 1 July 2021, Sched­ule 1 to the Cor­po­ra­tions Amend­ment (Statu­to­ry Min­i­mum) Reg­u­la­tions 2021 (Cth) (Reg­u­la­tions) came into force, increas­ing the min­i­mum amount which a debtor com­pa­ny must owe a cred­i­tor before that cred­i­tor can issue a statu­to­ry demand to the debtor (Statu­to­ry Min­i­mum) and chang­ing, for some debtors, the peri­od in which debtors can com­ply with a statu­to­ry demand (Statu­to­ry Peri­od).

Before 1 July 2021, the Statu­to­ry Min­i­mum was $2,000, unless the debtor com­pa­ny was eli­gi­ble for tem­po­rary restruc­tur­ing relief pur­suant to sec­tion 458E in Part 5.3B of the Cor­po­ra­tions Act 2001 (Cth) (Tem­po­rary Restruc­tur­ing Relief), in which case it was $20,000 pur­suant to Sched­ule 2 to the Cor­po­ra­tions Amend­ment (Cor­po­rate Insol­ven­cy Reforms) Reg­u­la­tions 2020 (Reforms Reg­u­la­tions).

The Statu­to­ry Peri­od has for a long time been 21 days. The Reforms Reg­u­la­tions extend­ed that to 6 months for debtor com­pa­nies eli­gi­ble for Tem­po­rary Restruc­tur­ing Relief.

From 1 July 2021, the Statu­to­ry Min­i­mum increased to $4,000 (from $2,000) unless the debtor com­pa­ny was eli­gi­ble for Tem­po­rary Restruc­tur­ing Relief, in which case it is $20,000 and 6 months to com­ply. How­ev­er, that high­er Statu­to­ry Min­i­mum and longer Statu­to­ry Peri­od for debtor com­pa­nies eli­gi­ble for Tem­po­rary Restruc­tur­ing Relief are com­ing to an end. 

In that regard, all debtor com­pa­nies served with a statu­to­ry demand on or after 1 August 2021 will be sub­ject to the $4,000 Statu­to­ry Min­i­mum and a 21-day Statu­to­ry Peri­od, regard­less of whether they were eli­gi­ble for Tem­po­rary Restruc­tur­ing Relief.