ATO Payment Arrangements

A tax debt which gets out of control and is not subject to an ATO payment arrangement can result in the ATO:

• Adding general interest charge and possibly penalties, which will increase a company’s tax liabilities;
• Issuing Director Penalty Notices to the company’s directors.  This can make the directors personally liable for the company’s PAYG Tax, GST and superannuation debts;
• Issuing Garnishee Notices to the company’s bank(s) or debtors. These notices require the bank(s) and debtors to pay funds held on behalf of the company, or payable to the company, to the ATO; and/or
• Commencing action to liquidate the company by issuing a Statutory Demand and then filing a Winding Up Application.

It is important for companies which fall behind in payment of their tax obligations to be proactive in their dealings with the ATO. As if discussions are not commenced with the ATO regarding the manner in which tax debts may be settled, the ATO is more likely to take recovery action.

We assist company directors and their accountants deal with unmanageable tax debts.  This includes, discussing risks associated with a company’s circumstances and formulating a manner in which to deal with the company’s problems. To deal with tax debts this includes negotiating ATO payment arrangements including getting the ATO to reduce interest and penalties which it has assessed.

We recommend that company directors are proactive in their dealings with the ATO, However, we also provide assistance to companies with significantly overdue tax debts and lodgement obligations. This includes where the ATO has already taken some form of recovery action.

Examples of Successful ATO Payment Arrangements

We assist in negotiating numerous payment arrangements for companies with the ATO each year, however, some of the matters we have successfully dealt with in the past are as follows:-

• We assisted a large transport company negotiate its 9^th ATO payment arrangement in respect of debts totalling several hundred thousand dollars, which included the ATO writing off a portion of the interest and penalties which it had charged the company.
• We provided advice and assistance to a group of civil contracting companies including getting the ATO to withdraw a winding up application. This helped the companies avoid liquidation.
• We assisted a company’s directors negotiate a payment arrangement with the ATO in respect of amounts claimed by the ATO, totalling several hundred thousand dollars. The ATO was claiming the debt against the company and its directors as a result of Director Penalty Notices issued.
• We have on numerous matters assisted a company’s accountant put forward a proposal for a payment arrangement to the ATO iwhere we considered that it was warranted for the accountant to do so, rather than the company engaging us to make the proposal.

Information and Advice

If you wish to obtain advice or assistance regarding any of the above matters, please contact our Brisbane or Gold Coast office. Our experienced staff will be able to assist you.

Court-Appointed Liquidations

A creditor who is owed over $2,000 by a company can apply to Court to have the company placed in liquidation.

The Court may also appoint a liquidator to a company as a result of an application made by a director or member (shareholder) of the company, the company itself, a provisional or voluntary liquidator, or the Australian Securities & Investments Commission.

The purpose of appointing a liquidator to an insolvent company is to have an independent and suitably qualified person take control of the company, investigate its affairs, determine whether any assets or funds may be available or recoverable to pay creditors and wind up the company in an orderly and fair way for the benefit of all creditors.

Role of the Liquidator

The liquidator of the company will determine the assets of the company (if any) and their value and take steps to realise any assets which are identified, if it is commercial to do so. In accordance with their duties, a liquidator will also conduct a review of the records and financial history of the company in order to investigate such things as:-

• The financial performance of the company;
• Whether any preference payments have been made to creditors, or uncommercial transactions entered into by the company, or other matters which may give rise to potential recovery actions by a Liquidator;
• Whether the company has traded whilst insolvent and the extent of any insolvent trading claim against the company’s director(s); and
• Any offences which ought to be reported to the Australian Securities & Investments Commission.

The liquidator will distribute the funds received from the realisation of a company’s assets, after payment of the liquidator’s costs, in accordance with the priorities set out in the Corporations Act 2001 (Cth), being generally:-

• Firstly (subject to some exceptions) payment to creditors who hold security over a company’s assets;
• Secondly in payment (either in full or in part) of unpaid employee entitlements; and
• Thirdly in payment of debts owed to ordinary unsecured creditors, with creditors being paid on a pro-rata basis based on the amount of their debts.

Director’s Duties and Obligations

A company’s director has the same duties and obligations during the period of a liquidation as the director had prior to the liquidator’s appointment. In addition, a company’s director must:-

• Provide the liquidator with a Report as to Affairs for the company;
• Provide all of the company’s books and records to the liquidator; and
• Reasonably assist the liquidator in carrying out his or her role.

Information and Advice Regarding Court Liquidation

If you would like to obtain further general information regarding liquidation you may wish to access our Liquidation FAQ page.

If you are seeking advice regarding liquidation, please contact our Brisbane or Gold Coast office and our experienced staff will be able to assist you.

Creditors’ Voluntary Liquidation

A creditors’ voluntary liquidation, is the term used to define the voluntary liquidation of an insolvent company.

A voluntary liquidation may occur either:

• Through the shareholders of an insolvent company resolving to appoint a liquidator to the company; or
• Following a voluntary administration of a company.

Role of the Liquidator

The liquidator of the company will determine the assets of the company (if any) and their value. He or she will then take steps to realise any assets which are identified, if it is commercial to do so. In accordance with their duties, a liquidator will also conduct a review of the records and financial history of the company in order to investigate such things as:

• The financial performance of the company;
• Whether any preference payments have been made to creditors, or uncommercial transactions entered into by the company, or other matters which may give rise to potential recovery actions by a Liquidator;
• Whether the company has traded whilst insolvent and the extent of any insolvent trading claim against the company’s director(s); and
• Any offences which ought to be reported to the Australian Securities & Investments Commission.

The liquidator will distribute the funds received from the realisation of a company’s assets, after payment of the liquidator’s costs. This is done in accordance with the priorities set out in the Corporations Act 2001 (Cth), being generally:

• Firstly (subject to some exceptions) payment to creditors who hold security over a company’s assets;
• Secondly in payment (either in full or in part) of unpaid employee entitlements; and
• Thirdly in payment of debts owed to ordinary unsecured creditors, with creditors being paid on a pro-rata basis based on the amount of their debts.

Benefits Associated with a Creditor’s Voluntary Liquidation

There are often benefits to arranging for a voluntary liquidation, including:

• It is a way in which a director may avoid or limit personal liability under a Director Penalty Notice issued by the ATO.
• It may limit or reduce the company’s directors’ liability for insolvent trading.
• It may limit or reduce the company’s directors’ liability for certain offences under the Corporations Act 2001 (Cth).
• It results in an independent person being appointed to the company, who will conduct an orderly winding up of the company’s affairs.
• It avoids the company being placed in liquidation by the ATO or another creditor.

Where a company’s shareholders wish to arrange a voluntary liquidation, this can be done within a short period of time. The voluntary liquidation appointment is made by way of the shareholders signing a resolution for the liquidator’s appointment. Where we are engaged to assist with the process we will prepare this resolution and assist with further pre-appointment steps.

Director’s Duties and Obligations

A company’s director has the same duties and obligations during the period of a liquidation as the director had prior to the liquidator’s appointment. In addition, a company’s director must:

• Provide the liquidator with a Report on Company Activity and Property (ASIC Form 507) for the company;
• Provide all of the company’s books and records to the liquidator; and
• Reasonably assist the liquidator in carrying out his or her role.

Information and Advice Regarding Voluntary Liquidations

If you would like to obtain further general information regarding liquidation you may wish to access our Liquidation FAQ page.

If you are seeking advice regarding voluntarily appointing a liquidator to a company, please contact our Brisbane or Gold Coast office. Our experienced staff will be able to assist you.

General Advice and Assistance

At Pearce & Heers we commonly provide pre insolvency advice and other assistance to company directors and individuals facing financial difficulties. Some of the areas in which we specialise in providing advice and assistance are:-

Advice and Assistance to Accountants

Pearce & Heers specialises in providing advice and assistance to accountants regarding their client’s financial affairs. We are often contacted by accountants whose clients are in financial difficulty who either want to generally discuss their client’s circumstances and issues or who may wish to arrange a meeting with us where we can formally review an individual or company’s position and discuss the options which may be available.

We will generally have an initial discussion or consultation with an accountant at no cost to their client and will be up front with any costs which we may charge for any additional or specific work which we may perform for their client in the future.

General Meetings, Discussions and Advice

If you are the director of a company or an individual facing financial difficulty Pearce & Heers can review your circumstances and advise on options available, including any risks which may arise, future strategies and possible formal or informal insolvency appointments.

We can then, if necessary, either provide further assistance in dealing with financial problems or, should it be your desired course of action, administer a personal or corporate insolvency appointment.

Pre Insolvency Advice – Liquidation

Pearce & Heers provides pre insolvency advice to directors of insolvency companies regarding the liquidation process, matters that a liquidator will attend to and any risks associated with placing a company in liquidation. In circumstances where we provide advice to a director which we consider excludes us from acting as liquidators of a company we will, if required, assist the director in arrange for another insolvency practitioner from a third party firm to be appointed.

Pre Insolvency Advice – Bankruptcy

Pearce & Heers also provides pre insolvency advice to individuals who wish to file for bankruptcy. We can then assist individuals file Debtor’s Petitions either appointing trustees from Pearce & Heers or appointing the Official Trustee from the Australian Financial Security Authority.

Post Liquidation or Bankruptcy Advice

We commonly assist company directors or bankrupts deal with issues which may arise with a third party liquidator or trustee who has been appointed. This may include:-

• Assisting with preparation of required statutory documents such as Reports as to Affairs and Statements of Affairs;
• Providing advice and assistance in conducting meetings with a liquidator or trustee;
• Reviewing claims which may be pursued against an insolvent’s related entities; and
• Assisting with the resolution of claims or issues which may be brought or raised by a liquidator or trustee.

Director Penalty Notices

We have advised numerous company directors who have received director penalty notices regarding the options available to them, including placing the company in administration or liquidation, entering into a payment arrangement with the ATO, or other options for Director Penalty liabilities which cannot be avoided. Find out more.

Negotiations with the Australian Taxation Office

We are experienced in conducting negotiations with the ATO regarding payment arrangements for individuals and companies and we negotiate numerous payment arrangements with the ATO each year.

Solvency Reviews

We are often engaged by a company, commonly via its accountant, to review the company’s circumstances and provide either general or formal advice on the company’s current solvency and risks to its ongoing solvency. In circumstances where we take on such an engagement we can also advise company directors in relation to future strategies which may be implemented to improve a company’s financial performance or deal with creditor claims which a company cannot immediately pay.

Assisting with Claims by Creditors

Pearce & Heers can provide general advice and assistance to companies or individuals who are subject to large claims by creditors which they cannot pay. This will generally involve us reviewing relevant circumstances and financial information and determining a strategy which may seeking to negotiate an informal settlement or payment arrangement or assisting an individual file for bankruptcy or a director place a company into liquidation.

Assisting with Statutory Demands and Winding Up Applications

In circumstances where a creditor has taken formal recovery action by issuing a company with a Statutory Demand and possibly subsequently a Winding up Application, Pearce & Heers can also provide assistance with reviewing a company’s financial position, considering risks to the company’s director and formulating a strategy to deal with the claim being pursued. Such a strategy may include seeking to negotiate a payment arrangement such that the creditor adjourns or withdraws the Winding up Application, appointing a voluntary administrator, or letting the company be wound up if there is limited or no prospect of the company continuing trading.

Information and Advice

If you are seeking advice or assistance regarding Director Penalty Notices, please contact our Brisbane or Gold Coast office for an initial obligation free consultation.

Informal Arrangements and Settlements

Informal Arrangements

In some circumstances individuals or companies that are unable to pay all amounts which they owe to creditors may be able to negotiate debt settlements or arrangements with some or all of their creditors in order to avoid bankruptcy or liquidation.

Pearce & Heers specialises in assisting to negotiate these types of debt settlements and informal  arrangements. The approach we commonly adopt is we provide creditors with a full summary of an individual’s or company’s financial position often with an estimate of the position should that party enter into a formal insolvency appointment, which assists creditors understand that a person or company cannot pay their debt in full. We will then generally make an offer of settlement to creditors on that person’s or company’s behalf and subsequently liaise with their creditors regarding the offer, any counter-offer received and if negotiations are successful in preparation of a settlement agreement.

When creditors understand an entity’s financial position and the prospects of recovery should that entity enter into a formal insolvency appointment, they may often be open to negotiating a settlement of their debt for a lower amount, reducing the interest on their debt for a period, or allowing deferred payment of their debt.

Informal arrangements can be proposed quickly and efficiently, however they require acceptance of the proposed settlement offer by each of a person’s or company’s creditors (or possibly the vast majority of creditors) to be successful. If one or more creditors reject a proposed offer the informal arrangement may not be able to proceed. Consequently, proposing such arrangements is more difficult as the number of creditors increases.

Additionally it is generally more likely for this process to be successful if a person or company is able to make an offer to creditors for a significant portion of their debts, although this may not always be necessary.

In considering whether to undertake this process, company directors and individuals must be aware that not all such informal matters will result in a successful outcome, however, it may be a better strategy than an immediate formal insolvency appointment.

If you would like to discuss the options available to you, including negotiating informal settlement arrangements, please contact us for an initial obligation free consultation.

Dispute Resolution and Debt Settlements

We are often approached by individuals or companies that are subject to legal claims or proceedings, or those parties’ solicitors, in circumstances where the individual or company is unable to continue funding the litigation or meet the amount of any judgment which has been obtained or which may be obtained in the future.

Pearce & Heers specialises in assisting individuals and companies resolve litigation and disputes with a commercially-minded approach, which may often benefit both parties to the dispute. As with the negotiation of general informal arrangements with creditors, we commonly do this by providing the other side to a dispute with a summary of an entitles financial position, along with details of any estimated future costs to that entity of defending claims against it and a summary of estimated outcomes should the entity we are acting for be forced to make a formal insolvency appointment.

Whilst there is obviously no certainty of achieving a settlement through this process it provides a further option for parties who are subject to litigation to consider in circumstances where they cannot afford to continue to fund the litigation or meet the amount of any claim against them and it may result in settlement of disputes on commercial terms.

Examples of Arrangements and Debt Settlements we Have Assisted with

We have recently successfully assisted numerous individuals and companies enter into informal arrangements and settlements with their creditors, including in respect of the following matters:

• Assisting a large transport company negotiate its 9th payment arrangement with the ATO in respect of debts totalling several hundred thousand dollars, which included the ATO writing off a portion of the interest and penalties which it had charged the company.
• Assisting a group of civil contracting companies negotiate a payment arrangement with the ATO which resulted in the ATO withdrawing a winding up application which the ATO had filed against one of the companies.
• Assisting a company’s directors negotiate a payment arrangement (from the company) with the ATO in respect of amounts claimed by the ATO, totalling several hundred thousand dollars, which the ATO was claiming against the company and its directors as a result of Director Penalty Notices issued.
• Assisting three partners of a partnership negotiate settlements with their former landlord, substantial supplier and one other creditor.
• Assisting a company and its director negotiate a settlement with the company’s former landlord in respect of a debt owed to the company’s landlord which was for an amount of several hundred thousand dollars and which the director had personally guaranteed.
• Assisting a number of parties negotiate settlements in respect of legal claims being pursued against them, which the parties could not continue to defend given the significant legal costs involved.
• Assisting a debtor negotiate a settlement with a creditor who had commenced bankruptcy proceedings against them for a debt which the debtor could not pay.
• Assisting a number of parties negotiate settlements with their banks in respect of shortfalls suffered by the banks upon sale of properties subject to their securities.
• Assisting a number of property developers in negotiations with secured creditors such that the secured creditors agreed to stay enforcement action to give the development companies time to conduct an orderly sale of properties subject to security.

Advice and Assistance

If you are seeking advice or assistance regarding these types of matters please contact our Brisbane or Gold Coast office for an initial obligation free consultation.

Receiverships

The most common type of receivership is where a secured creditor appoints a third party as receiver or receiver and manager of a company or its assets. A receiver may also be appointed to a company by the Court, however, these types of appointment are much less common.

This information relates to appointments of receivers made by secured creditors.

Appointment and Role of Receiver

A secured creditor can appoint a receiver to a company pursuant to a security agreement between the company and the secured creditor, which provides the secured creditor with security over some or all of the company’s assets. A receiver can only be appointed by a secured creditor to those assets over which the secured creditor holds security.

A receiver appointed to a company will generally:-

• Seek to realise or recover assets of the company which are secured by the security under which the receiver is appointed; and
• Distribute funds received in accordance with the requirements and priorities set out under the Corporations Act 2001 (Cth).

Distribution of Funds Realised by Receiver

The funds recovered by a Receiver will, after payment of the receiver’s costs, be distributed as follows:-

• From funds recovered from circulating assets (such as cash at bank, debtors and inventory) first in payment of certain priority employee entitlements and secondly in payment of amounts owed to secured creditor(s); and
• From funds recovered from the sale of assets which are non-circulating assets (such as land, real property, plant and equipment and motor vehicles) in payment of amounts owed to secured creditor(s).

Any surplus available to a receiver after paying the above required amounts in full will then be available to be paid to the company or a liquidator of the company if one has been appointed. There is generally no other obligation or requirement of a receiver to use or make a company’s funds available to pay amounts owed to ordinary unsecured creditors whose debts were incurred prior to the receiver’s appointment.

Director’s Duties and Obligations in Receivership

A company’s director has the same duties and obligations during the period of a receivership as the director had prior to the receiver’s appointment. In addition, a company’s director must provide a receiver with a Report as to Affairs for the company, all of the company’s books and records which are subject to the receiver’s appointment and the director must reasonably assist the receiver in carrying out his or her role.

Finalisation of a Receivership

A receivership will end when the receiver resigns from his or her appointment or the appointment is finalised by the secured creditor. This will generally occur when the receiver has realised sufficient funds to pay the secured creditor in full or has realised all assets of the company subject to the receiver’s appointment which are commercially warranted to realise. Upon the finalisation of a receivership control of the company will return to the director(s) unless a liquidator or administrator has been appointed to the company.

Advice Regarding Receivership

If you are seeking advice regarding receivership or if you wish to discuss appointing any of the qualified staff members at Pearce & Heers as receiver please contact our Brisbane or Gold Coast office and our experienced staff will be able to assist you.

Turnaround

Business Turnaround

Many business owners do not know the break-even point for their business and do not adequately focus on the key drivers of profitability.  This is a significant opportunity for consulting work for accountants to assist directors with:

• Options available to increase revenue or reduce general costs and expenses;
• Options available to reduce fixed overheads, such as seeking to renegotiate lease or finance arrangements or arrange exit strategies if lease or finance agreements are no longer necessary;
• Strategies which may be available to recover or realise amounts from overdue debtors or the sale of other assets, which may not be of core importance to a company’s business;
• Finance options which may be available to provide immediate cash flow; and
• Coaching them to “work on, not in” the business.

We provide advice, guidance and assistance to accountants and company directors in respect of strategies which can be implemented to turnaround a company’s business so that it may trade profitably in the future.

In some circumstances we may also be able to assist businesses in negotiating arrangements so that debts owed to creditors may be paid over time or coming to arrangements with creditors to compromise their debts.  Such arrangements can assist a business with immediate cash flow problems by reducing or deferring current liabilities.

Business Sales

An insolvent company may agree to sell its business to another entity with the insolvent company to then be placed into liquidation at some point in the future.   Such a sale may either be on the open market, if possible, or to a new entity, which may be related.  If the sale is to a related entity then the sale ought to focus on a company’s core business / assets with a view to the new purchasing entity being in a position to trade profitably.

In any sale of a business or assets a company’s directors must comply with their duties, which include acting in the best interests of the company and all stakeholders. Where a company cannot pay its debts, directors’ duties also include having regard to and acting in the best interests of the creditors.  To ensure compliance with a director’s duties, any sale of a company’s business and assets ought to be entered into for fair value and on commercial terms.  This is particularly important in circumstances where a sale to a related entity will not enable all debts of the company to be paid and it is likely that the company will be placed in liquidation at some point in the future.

If a sale is not transacted for fair value and on commercial terms it may disadvantage creditors and give rise to breaches of director’s duties, recovery claims by a liquidator and offences being reported to the ASIC, which may subsequently prosecute directors. This conduct is commonly referred to as “illegal phoenix activity”, however, the ASIC recognises that there is a distinction between “legal” and “illegal” phoenix activity depending on whether the issues of value and commerciality are adequately addressed in the sale.  Accordingly, proper legal and accounting advice ought to be obtained to ensure that sale arrangements are properly structured and do not give rise to “illegal phoenix activity”.  In this regard there has recently been a significant growth in the number of “fringe advisers” who provide advice regarding financial difficulties but are not qualified insolvency practitioners and are unregulated. Certain of these advisers have been associated with “illegal phoenix activity” and this issue is under scrutiny from the ASIC and the ATO which are looking to pursue prosecutions in this area.

The benefits of a sale of business to a related entity may include the directors maintaining control of the business rather than an administrator or liquidator taking control, continuity of the business in the transmission to the purchaser and the directors have the opportunity to communicate and manage dealings with clients, employees, suppliers and financiers.

There are a number of issues to be addressed in a sale of a business including:

• The manner in which a business is valued;
• If a sale is to a related entity, the manner in which consideration is to be paid or provided to ensure that the sale is transacted for fair value and on commercial terms;
• How existing contracts or incomplete projects are to be dealt with;
• The impact of the sale on future dealings with the vendor company’s suppliers;
• The effect of the sale on leases which the vendor company is a party to;
• How will loans and finance agreements be dealt with, including obtaining any necessary approval of the sale by relevant secured creditors;
• Whether some or all employees will be transferred to the purchasing entity and if so what employee entitlements will the purchasing entity be required to assume;
• How the purchasing entity will fund its initial trading costs; and
• Where the sale price for a business is insufficient to pay all amounts which are owed to creditors, the impact of residual personal liabilities which may remain for the directors and how those liabilities may be dealt with, for example any loan account debts owed by directors, personal guarantee debts and ATO claims for PAYG Tax and SGC where Director Penalty Notices have been issued and expired or “lock down” director penalty provisions apply.

Information and Advice

If you are seeking advice or assistance regarding this matter please contact our Brisbane or Gold Coast office for an initial obligation free consultation.

Voluntary Administrations and Deeds of Company Arrangement

Voluntary administration is a means of avoiding liquidation of a company.

The directors of a company which is insolvent, or is about to become insolvent, may appoint an administrator to the company. An administrator may also be appointed by a liquidator or provisional liquidator of the company or by a secured creditor who holds security over most of the company’s property (although such appointments are uncommon).

The objective of voluntary administration is generally to allow a company to continue trading and to enable its business, property and affairs to be administered in a way that maximises the chances of the company continuing in existence.

Administration is a temporary phase during which the administrator is in control of the company’s affairs. The administrator conducts investigations and issues a report to creditors regarding the options of placing the company in liquidation or accepting a proposal for a Deed of Company Arrangement (“DOCA“) to settle debts and return control of the company to the directors.  A meeting of creditors is held within 25 business days (5 weeks) of the appointment at which creditors vote on whether to place the company in liquidation or accept a proposal for a DOCA (there is a third option to simply end the administration and return the company to the control of the directors but this is rare).

Proposal for a Deed of Company Arrangement

A proposal for a DOCA may include various terms, however, generally a proposal will seek to provide for a better return to creditors than that which will be available in the liquidation of the company through:

• Finance from a bank or lender;
• Voluntary contributions to the company by its directors, members or other parties;
• The sale of some or all of the company’s assets;
• Pursuit of some claim available to the company;
• Contributions to pay creditors from the company’s future trading profits; and/or
• Certain creditors agreeing not to claim in the DOCA (most commonly creditors who are related parties of the company).

If a proposal for a DOCA is accepted by a majority in number and value of creditors, at a meeting convened by the administrator to consider approving the proposal, it is binding on all of the company’s unsecured creditors and the company may be able to continue trading.

Benefits of the Voluntary Administration Process

There may be benefits in arranging for the appointment of an administrator to a company, including:

• A moratorium being placed on creditors pursuing claims against a company’s director under personal guarantees although the moratorium ends if the company enters into a DOCA or is placed in liquidation;
• Maximising the chances of the company continuing in existence;
• Providing for a better return to creditors than liquidation; and
• Limiting or avoiding personal liability of directors, such as liability under Director Penalty Notices or for insolvent trading.

Possible Issues or Problems Associated with the Voluntary Administration Process

There may also be possible issues or problems associated with the appointment of an administrator to a company, including:

• Existing clients (that is with respect to current projects) would be notified of the appointment of an administrator and it may impact on the company’s relationships with these clients.  It is also likely that prospective clients will become aware of the appointment which may affect the company’s ability to win new work;
• The appointment of an administrator may impact on the company’s relationships with suppliers and other creditors;
• The appointment of an administrator may terminate or be an event of default under contracts;
• There can be significant costs associated with the administration appointment;
• The administrator is liable for all debts incurred by the company during the period of administration and so in order to continue trading the company’s business, the administrator would seek to ensure that sufficient funds are available at the outset of the appointment and throughout the administration period to meet all debts and costs involved;
• A company’s directors may only wish to appoint an administrator if viable proposal for a DOCA can be put forward which has reasonable prospects of being accepted by creditors;
• A DOCA releases creditors’ unsecured claims against the company but does not release personal guarantee or other personal claims against a company’s directors or other parties; and
• The appointment of an administrator may trigger a secured creditor appointing a Receiver to the company.

Advice Regarding Voluntary Administration and Deeds of Company Arrangement

If you are seeking advice regarding voluntary administration and DOCAS, please contact our Brisbane or Gold Coast office and our experienced staff will be able to assist you.