Practice area
Insolvency, Restructuring & BankruptcyBankruptcy, restructuring and insolvency
Define the intended work in Insolvency, Restructuring & Bankruptcy, confirm the applicable requirements and select a task to plan the necessary review.
Key facts
- Tasks covered
- 34
- Tasks with a step-by-step checklist
- 20
- Local differences
- 3 jurisdictions where this area changes
Jurisdiction
Tasks
GreenLawyer reviewYellowClose supervisionRedLawyer-led
| Task | How AI is used | Human involvement | What the lawyer must review |
|---|---|---|---|
| Assemble a creditor proof-of-debt evidence pack | Reconcile invoices, credits and payment records into a schedule and index the documents supporting the creditor’s claimed balance. | YellowClose supervision |
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| Organise the evidence for an urgent solvency review | Create a dated evidence index of cash, overdue debts, commitments and forecasts; flag missing or inconsistent records without issuing a solvency conclusion. | RedLawyer-led |
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| Triage a statutory demand and preserve the service evidence | Index the demand, accompanying material and service records into a factual timeline, leaving disputed dates and debt issues explicitly unresolved. | RedLawyer-led |
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| Assemble the facts for a solvency review and safe-harbour discussion | From the supplied accounts and cash-flow papers, list solvency indicators, related-party payments and documents still needed for a safe-harbour discussion. | RedLawyer-led |
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| Assemble the facts for a s 588GA safe-harbour and solvency discussion | From the accounts and cash-flow papers, list solvency indicators, related-party payments and documents needed for a s 588G/588GA and ASIC RG 217 safe-harbour discussion. | RedLawyer-led |
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| Prepare appointment papers for administration, liquidation or receivership | From the appointor's instructions, the ASIC company extract and the PPSR and title searches, the tool builds the appointment checklist set by the Act and the Insolvency Practice Rules, tabulates the company's officers, registered office, registered charges and creditor addresses, compares those particulars against the consent to act, the ASIC notification forms and the first creditor notices the lawyer has written, and lists the company records still missing. It writes no part of those instruments and no part of any first-day affidavit or declaration of solvency — no draft, no scaffold, no suggested paragraphs; on the sworn material it may only index the exhibits, list facts that still need a source and check the form against the court's and the Rules' requirements. | RedLawyer-led | The lawyer confirms the appointment is validly made and that each consent, ASIC form and creditor notice is the current version, correctly addressed and served within the statutory time. The lawyer writes the first-day affidavit themselves and checks their own draft sentence by sentence against the deponent's own knowledge, the company records and the exhibits before it is sworn. |
| Prepare appointment papers for administration, liquidation, receivership or SBR | From instructions and company extracts, build the appointment checklist set by the Act and the Insolvency Practice Rules, tabulate the company’s officers, registered office, registered charges and creditor addresses, and list the company records still missing. The tool writes no part of the consents, the notices, the ASIC Form 505/509 cover letters or any first-day affidavit or declaration of solvency — no draft, no scaffold, no suggested paragraphs; on the sworn material it may only index the exhibits, list facts that still need a source and check the form against the court’s and the Rules’ requirements. | RedLawyer-led |
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| Draft the administrator's or trustee's report to creditors | Draft narrative sections of the report to creditors from the company's records and the proposal on the file, with every figure tagged to a source or marked as missing. | YellowClose supervision |
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| Draft the s 439A report to creditors and the r 75-225 information report | Draft narrative sections of the s 439A report and any r 75-225 report from the records, ROCAP and proposal, tagging each figure to a source or marking it missing. | YellowClose supervision |
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| Draft a deed of company arrangement or comparable restructuring deed | Draft a restructuring deed from the term sheet covering the fund, moratorium, administrator role and distribution waterfall, listing non-standard terms to settle. | YellowClose supervision |
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| Draft a deed of company arrangement from the term sheet | Draft a DOCA from the term sheet (fund, moratorium, administrator role, waterfall), listing non-standard terms, PPSA priority carve-outs and related-party voting limits. | YellowClose supervision |
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| Review proofs of debt and draft the dividend schedule | Compare each proof with the company's records, flag incomplete proofs and draft a working admitted/rejected/need-more-info schedule. | RedLawyer-led |
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| Build a voidable-transaction and preference issues table | From bank statements and payables, build a chronology for the relation-back or preference window and flag candidate voidable payments with dates and amounts. | YellowClose supervision |
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| Build a voidable-transaction table under Corporations Act Pt 5.7B or the Bankruptcy Act | From bank statements and payables, build a chronology for the relation-back window (6 months; 4 years for related parties) and flag candidate voidable transactions under Pt 5.7B or Bankruptcy Act ss 120–122. | YellowClose supervision |
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| Draft the statutory report to the insolvency regulator | Draft a narrative misconduct report from interview notes, the report as to affairs and financial analysis, tagging each allegation to a source document. | YellowClose supervision |
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| Draft the statutory misconduct report to ASIC under s 533, s 422 or Bankruptcy Act s 304 | Draft a narrative misconduct report from interview notes, the ROCAP and financial analysis, tagging each allegation to a source document. | YellowClose supervision |
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| Prepare public-examination topics, documents and a hearing pack | From the documents produced, the books and records and any earlier examination transcript the lawyer has cleared, work up with the lawyer the examination topic list keyed to the page that supports each topic, the schedule of documents for the production order, and the indexed hearing pack for each examinee. The tool writes no part of the affidavit supporting the summons application: no draft, no scaffold, no suggested paragraphs; once the lawyer has written it, the tool may only index its exhibits and check it against the court's form. | YellowClose supervision | Scope, privilege and the court order limit the examination, so settle the topics and the questions yourself against the summons and production order as granted, and do not upload restricted transcripts to an unvetted tool. The supporting affidavit is the lawyer's own drafting and the deponent's sworn evidence: check each ground stated in it against the document it comes from, and confirm the deponent has read and adopted it before it is sworn and filed. |
| Prepare public-examination topics under ss 596A/596B or Bankruptcy Act s 81 | From cleared production and transcripts, draft the examination topics and the document list for the production order. The tool writes no part of the affidavit supporting the summons application — no draft, no scaffold, no suggested paragraphs; once the lawyer has written it, the tool may only index its exhibits and check it against the court’s form. Check GPN-AI and NSW SC Gen 23 duties for filed material. | YellowClose supervision |
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| Draft winding-up, preference-recovery or stay application papers | From the demand, the affidavits already sworn and the company extracts, build a dated chronology that cites the source document for every entry, and index the exhibits and annexures to each affidavit. The tool writes no part of the originating process or of any supporting affidavit — no draft, no scaffold, no suggested paragraphs; on the sworn evidence it may only list the facts that still need a source and compare the affidavit the lawyer has written against the demand, the cited documents and the court’s affidavit form. | RedLawyer-led |
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| Draft winding-up, preference-recovery or stay papers under ss 459A–459P | Build the chronology from the demand and the extracts, citing the source document for every entry, and index the exhibits to each affidavit. The tool writes no part of the originating process or of any supporting affidavit — no draft, no scaffold, no suggested paragraphs; on the sworn evidence it may only list facts that still need a source and compare the lawyer’s draft against the cited documents and the court’s form. Meet GPN-AI duties (also NSW SC Gen 23, Qld PD 5 of 2025). Invent no citations. | RedLawyer-led |
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| Prepare personal-insolvency papers: bankruptcy notice, petition or equivalent | Draft a bankruptcy notice, petition or equivalent papers from the judgment and debt evidence, with a forms-and-service checklist. Do not insert a calendar deadline. | YellowClose supervision |
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| Map a US bankruptcy filing to the Bankruptcy Code | Extract dates, debts and chapter-selection issues from the papers into a checklist labelled with Bankruptcy Code section numbers the lawyer must confirm. | YellowClose supervision |
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| Prepare bankruptcy notice, sequestration or PIA papers under the Bankruptcy Act 1966 | Draft a bankruptcy notice, sequestration application or equivalent from the judgment and debt evidence, with an AFSA forms-and-service checklist. Insert no deadline. | YellowClose supervision |
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| Decide whether the debt can support a creditor’s statutory demand | Extract invoice dates, credits and payments into a schedule of amounts said to be due, and flag any description that does not match the proposed demand. | RedLawyer-led |
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| Decide whether the debt can support a Companies Act statutory demand | Extract the debt, contract, invoices and any dispute from the file. | RedLawyer-led |
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| Check the statutory demand and verifying affidavit against the current prescribed forms | From the demand and the affidavit verifying the debt that the lawyer has written, extract the debtor's name and ACN, the registered office, every amount in the schedule of debt and the payment and set-aside paragraphs into a table set against the current prescribed form of demand and the forum's affidavit form, and list each difference. The tool writes no part of the verifying affidavit — no draft, no scaffold, no suggested paragraphs — and it alters neither document: it reports the differences for the lawyer to correct. | RedLawyer-led | Read every line of your own demand against the current prescribed form and every line of your own verifying affidavit against the rule and form that govern it in the forum, and satisfy yourself on the source ledger, not on the tool's table, that each scheduled amount is due and payable and meets the statutory minimum. Correct any defect in the affidavit yourself, and have the deponent read it before it is sworn or affirmed. |
| Check the statutory demand and verifying affidavit against Form 509H and Form 7 | Extract the debtor’s name, ACN, registered office, each scheduled amount and the payment paragraph from the draft into a comparison table against Form 509H and Form 7. | RedLawyer-led |
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| Settle service evidence and the challenge period before the demand is sent | Extract the registered office and any external-administrator address from a company extract the lawyer has opened, into a service note. Do not insert a calendar deadline. | RedLawyer-led |
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| Settle service and the section 459G period before the demand is sent | Extract the registered office, and any liquidator, administrator or restructuring practitioner address, from an ASIC extract the lawyer has opened, into a service note. Do not insert a calendar deadline. | RedLawyer-led |
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| Build a first-day creditors and security-interest map | From company records, register searches and the books, table creditors, claimed security, guarantees and related-party claims with document references. | YellowClose supervision |
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| Build a creditor schedule from books and proofs of debt | Reconcile ledgers, proofs and correspondence into a cited schedule. | RedLawyer-led | Adjudicate proofs; AI cannot decide admissibility. |
| Draft a voidable-transaction investigation chronology | Order bank statements and transactions by date with source references. | YellowClose supervision | Determine insolvency date and defences. |
| Prepare insolvency court filings with AI-use verification | Run a GPN-AI verification checklist over affidavits and submissions. | YellowClose supervision | Verify every authority personally. |
| Review voluminous books and records with AI in liquator litigation | Classify and summarise company records. | YellowClose supervision | Lawyer reviews key documents. |
| Automate collation for reports to creditors | Collate data and draft report sections. | YellowClose supervision | Practitioner verifies. |
| Draft procedural correspondence to the court with AI | Draft adjournment request emails. | GreenLawyer review | Lawyer checks before sending. |
| Apply the Voluntary AI Safety Standard to R&I AI deployments | Map AI use against the standard. | YellowClose supervision | Lawyer confirms. |
| Use AI e-discovery to flag areas of concern in insolvency investigations | Flag relevant communications. | YellowClose supervision | Lawyer reviews. |
| Summarise creditor claims into a schedule | Extract creditor amounts and security. | GreenLawyer review | Verify against proofs of debt. |
| Draft liquidator report sections | Draft background narrative from the records. | YellowClose supervision | Practitioner settles. |
| Analyse bank statements for voidable transactions | Flag payments in the relation-back period. | YellowClose supervision | Lawyer confirms the claims. |
| Draft the affidavit of debt in a winding-up in the Supreme Court of Western Australia | Do not substitute the deponent's words. List the invoices the deponent will verify. | RedLawyer-led | The affidavit stays in the deponent's own words. Amounts come from the invoices. |
| Draft the affidavit verifying a statutory demand in the Supreme Court of New South Wales | Do not generate the affidavit. List the debt documents the deponent will verify. | RedLawyer-led | The deponent verifies the debt. Disclose that generative AI did not generate the affidavit. Check the demand against the Corporations Act compilation. |
| Draft the affidavit in support of a winding-up application in the Supreme Court of New South Wales | Do not generate the affidavit. List the demand, the debt and the company search the deponent will cover. | RedLawyer-led | Take the affidavit from the deponent. Check the company details against the source search, not against a generated extract. |
| Prepare a chronology of demands and correspondence for a winding-up in the Supreme Court of New South Wales | List dates of demands and letters from the file into a chronology. | GreenLawyer review | Check every date against the file. If the chronology was prepared for the proceeding and is later annexed to an affidavit, paragraphs 13(b) and 15 apply to that annexure. Paragraph 14 says the paragraph 13(b) disclosure is not required where the annexure was not prepared for the proceeding. |
| Draft written submissions for a winding-up hearing in the Supreme Court of New South Wales | Draft submissions from the affidavits and the provisions the lawyer has opened. | YellowClose supervision | Verify every citation in the body against the Corporations Act compilation or the authority. |
| Prepare a creditor chronology from the company's books for a Supreme Court of New South Wales winding-up | List creditor names, amounts and dates from the books into a chronology. | GreenLawyer review | Check each amount against the books. Do not attach the list to an affidavit until the affidavit rules are applied. |
Firm-wide obligations
| Obligation | What it covers |
|---|---|
| Trust accounting & handling client money | Checks that apply across files. |
| Costs, billing & litigation funding | Checks that apply across files. |
| Client-facing & access-to-justice AI tools | Checks that apply across files. |
| Incoming evidence — deepfakes & synthetic documents | Checks that apply across files. |
| AI decision systems | Checks that apply across files. |
| Confidentiality & client information | Checks that apply across files. |
| AML/CTF — the practice as a reporting entity | Checks that apply across files. |
What changes in Australia
| Topic | What changes |
|---|---|
| Law | Corporations Act 2001 (Cth) Pts 5.1–5.9 and the Bankruptcy Act 1966 (Cth). Court processes have fixed deadlines; duties run to creditors, courts, ASIC and AFSA. |
| Court filings | Hallucinated citations bring costs and discipline (Murray v Victoria [2025] FCA 731: indemnity costs). Federal Court GPN-AI (16 April 2026) sets verification duties for filings and disclosure for AI-assisted evidence. |
| Figures | Errors in dividend calculations or solvency modelling cause direct creditor loss. |
| Debtor data | Putting insolvency files into unvetted AI tools breaches APP 11 and ASCR r 9 and may waive privilege. |
| Audit trail | External administrators must keep auditable, explainable decision records under the ARITA Code and the Corporations Act. |
| Limits on AI assistance |
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- ASIC: Insolvency for directors · 2026-09-16
- ASIC: Liquidation, a guide for creditors · 2026-09-16
- Federal Court of Australia: Winding up based on an unsatisfied statutory demand · 2026-09-16
What changes in New Zealand
| Topic | What changes |
|---|---|
| Corporate insolvency | Companies Act 1993 (liquidation, receivership) and the Insolvency Practitioners Regulation Act 2019. |
| Personal insolvency | Insolvency Act 2006, not the Bankruptcy Act 1966. |
| Demands and liquidation | Take statutory-demand and liquidation procedure from the Companies Act 1993 and the High Court Rules. No Part 5.3A administration or s 459E demand. |
| Limits on AI assistance |
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- Companies Act 1993 · 2026-09-23
- Insolvency Act 2006 · 2026-09-23
- Companies Register: what happens during liquidation · 2026-09-23
- Companies Office: legislation for our registers · 2026-09-23
- High Court Rules 2016 · 2026-09-23
What changes in United States
Known here as: Bankruptcy, restructuring and insolvency
| Topic | What changes |
|---|---|
| Governing law | The federal Bankruptcy Code in US bankruptcy courts, not Corporations Act administration or the Bankruptcy Act 1966 (Cth). |
| Court rules | Local bankruptcy rules and the judge's standing orders, including any AI certificate. |
| Citations | Rule 11 principles and Formal Opinion 512 govern generated citations in motions and briefs. |
| Limits on AI assistance |
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Precedents for this area
- Creditor's statutory demand (Form 509H) and verifying affidavit: drafting and service checklist (Checklist, AI use Red). Step-by-step checklist for preparing, checking and serving a creditor's statutory demand on a company, and for the debtor's 21-day set-aside window, so the demand survives a challenge.
- Creditor's bankruptcy notice: AFSA online application completion guide (Form, AI use Yellow). Practical guide to applying for a bankruptcy notice through AFSA Online Services: the preconditions, what goes in each part of the application, service, and the traps that defeat a later creditor's petition.
- Letter of advice to directors on insolvent trading and the safe harbour (Letter, AI use Red). Letter advising a company's board on the duty to prevent insolvent trading, how the s 588GA safe harbour works and what it requires, director penalty exposure, the formal options, and the steps to take now.
- Liquidator's letter of demand for repayment of an unfair preference (Letter, AI use Yellow). Letter from solicitors for a liquidator to a creditor that received payments before the winding up, setting out the unfair preference case, inviting a defence with evidence, and demanding repayment before proceedings under s 588FF.
- Declaration of independence, relevant relationships and indemnities (DIRRI), with appointment lodgement checklist (Other, AI use Red). Original DIRRI template for a voluntary administrator or liquidator in a creditors' voluntary winding up, covering the s 60 relevant-relationship and indemnity declarations, plus a checklist of first-week notices and ASIC lodgements, including Form 505.
- Protocol for AI-assisted review of company books and records in insolvency investigations (Policy, AI use Yellow). Protocol for administrators, liquidators and their lawyers using AI to triage company books, bank records and emails: approved tools, chain of custody, permitted and banned uses, verification before anything reaches creditors, ASIC or the court, and audit records.
- AI-use verification checklist for insolvency court documents (winding-up, set-aside and recovery applications) (Checklist, AI use Yellow). Pre-filing checklist for originating processes, affidavits and submissions in corporate and personal insolvency proceedings where AI was used, covering the Federal Court's GPN-AI and NSW's SC Gen 23 requirements.
All precedents for Insolvency, Restructuring & Bankruptcy. Signed-in accounts can read the full text.