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THE YEAR IN REVIEW

The Federal Government's promotion, as part of its National Innovation & Science Agenda, of a safe harbour for directors to strike a better balance between encouraging entrepreneurship and protecting creditors is to be welcomed.

But legislative reform is not the only answer. It merely provides a process for change. For restructurings to succeed, directors and management must accept the cultural challenge of restructuring. Transparency,broader stakeholder interaction, engagement with experienced outsiders and a willingness to sacrifice the sacred cows of the business to restore long-term value are each matters for a board and management to deal with in order to make a restructuring plan work. Only then,together with a change in the law, will innovation and entrepreneurship thrive. We elaborate on this theme in the prospect of a safe harbour.

We continue to be strong advocates for the value delivered to companies whose boards embrace experienced restructuring specialists being brought into situations well before the entities become truly distressed. In the rise and rise of restructuring plans we outline not only how the plans can be developed but how to judge their success.

Much of the challenging restructuring work in the year under review has emerged from the energy and natural resources sectors. Atlas Iron is a great example of the benefits which flow from the early engagement of restructuring specialists and we have used it as a case study. While the secondary market is firmly placed as a viable "enforcement" option in distressed situations to be weighed up against the long-term capital cost and uncertainty associated with informal workouts and the stigma of formal enforcements, there has been limited activity in the public space. We analyse the reasons for that and explain the rationale for growth in the private secondary market.

We also review the good, the bad and the ugly in Australian banking and a very interesting battle between the PPSA and insolvency which has played out in a significant piece of litigation in Victoria.

As we did last year, we finish with some bold predictions for FY17.

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