The Australian Federal Court has recently released new practice note 444DA, outlining changes to provisions for company arrangement deeds that favour companies and their employees.

The new provisions require that creditors accept partial payment for amounts owing to them, in order to keep troubled companies running.

Henry Davis York partner Scott Atkins agreed that part-payment is a better long-term solution for companies, since it helps prevent them from entering liquidation and provides an opportunity to recover losses.

If a company decided to cease operating, priority would be given to employees. "Employee issues are one of the "baskets of issues" in insolvency and the changes would be a positive step for creditors involved in a voluntary administration. It is a good example where courts can intervene and help a company through voluntary administration," he said.

He believes the changes would not affect his workload, which has so far been "exceptionally full." He added that insolvency lawyers would continue to be "extremely busy."