Abstract
<jats:title>Abstract</jats:title> <jats:p>This chapter argues that it is important to ensure that any insolvency process incentivizes directors to enter the process early or even attempt informal rescue early, so as to facilitate rescue where possible and also to protect creditors. A process that allows directors to stay in control of the company (a debtor in possession (DIP) model or something similar) is more likely to provide these incentives. Further, both law and non-law solutions are important to overcome the initiation problem. Using this lens of ‘incentives to overcome the initiative problem’, this chapter will review the small business insolvency resolution framework in Australia where a semi-DIP model, has been introduced.</jats:p>