This process enables directors to take advantage of a moratorium period during which an external administrator is in control of their company, to propose an arrangement for payment of debts for consideration by the company’s creditors. Voluntary Administration Gold Coast offers our low cost Voluntary Administration services at the best prices in Gold Coast.
The primary purpose of a Voluntary Administration is to provide a flexible procedure enabling a company time to attempt a compromise or arrangement with its creditors, which may save the company, the business and jobs while maximising the return to creditors.
Voluntary Administration Gold Coast is utilised to provide a company with a chance to trade out of its difficulties at a time when the company is unable to pay its debts (i.e. when the company is insolvent).
If it transpires that the company cannot formulate a proposal that is acceptable to creditors, Voluntary Administration Gold Coast can be used to easily and inexpensively wind up the company.
Voluntary Administrators are normally appointed by the directors of the company. Appointment is initiated when the directors of the company resolve that the company is, or is likely to become insolvent (section 436A of the Corporations Act, 2001).
The directors simply have to be satisfied that there is likelihood that the company will be insolvent at some future time.
An administrator can be appointed by a liquidator or a provisional liquidator (s436B). The liquidator or provisional liquidator may act as the administrator provided that the Court’s approval is obtained.
A secured creditor who has a charge on “the whole, or substantially the whole, of a company’s property” may also appoint an administrator: s436C.
An administrator must be a registered liquidator as required by the Corporations Act. Voluntary Administration Gold Coast can offer you a selection of experienced and expert administrators from our hand-picked panel of collaborators.
On appointment, control of the company and its property, business and affairs is vested in the administrator. The administrator is therefore responsible for the company’s affairs in the same way that the directors were prior to the administrator’s appointment.
Notice of the appointment must be published in the newspaper within three business days after appointment. Before the end of the next business day after appointment, notice must also be given to any holder of a charge or charges on the whole, or substantially the whole, of the company’s property: S 450A(3).
Where an administrator has been appointed by a secured creditor the chargee must give written notice of the appointment to the company as soon as practicable, but before the end of the next business day.
To find out more about what happens when the administrator takes control of a company you can speak with one of the administration specialists at Voluntary Administration Gold Coast. Just call 1300 60 70 60 for your free consultation. We have administration specialists that can help you to face voluntary administration in Gold Coast today.
To give the company breathing space, as and from the commencement of the Voluntary Administration, a moratorium comes into effect preventing creditors from taking actions or proceedings against the company or its property during the Voluntary Administration without the administrator’s written consent or the Court’s leave.
Subject to the exceptions mentioned below, the moratorium also binds owners or lessors of property being used, occupied by, or in the possession of the company. The administrator must not dispose of such property except:
The moratorium also prevents a person enforcing a charge on property of the company during the Voluntary Administration process, except with the administrator’s written consent or the court’s leave: s440B.
Owners or lessors of property used, occupied by or in the possession of the company who have enforced a right to take possession of the property prior to the administrator’s appointment.
Do you want to find out more about your rights and obligations during a moratorium period? You can have a free consultation with the Voluntary Administration Gold Coast team today. Simply call 1300 60 70 60 to make an appointment.
A guarantee of a debt incurred by the company (usually given by a director or a relative of a director) cannot be enforced during a Voluntary Administration, except with the Court’s leave. That protection ends if the company goes into liquidation and will usually end if a Deed of Company Arrangement is entered into.
If the creditors resolve that the company should execute a Deed of Company Arrangement, then the administrator of the company will become the administrator of the DOCA unless the creditors resolve otherwise: s444A.
The DOCA must be executed by the company within 15 business days after the second creditors’ meeting. The administrator must execute it before or as soon as practicable after the company executes it.
All pre-deed creditors are bound by the deed, irrespective of whether they voted in favour of the deed: s444D.
The administrator of a DOCA (as opposed to the administrator of a company) is not made personally liable by the Corporations Act for debts incurred by the company during the operation of the DOCA.
The position of secured creditors and owners or lessors of property under a DOCA.
The moratorium on the enforcement of rights is lifted once the DOCA is executed; however, the Court has the power, upon application of the Deed administrator, to restrain a secured creditor from realising its security or otherwise dealing with the security, or to restrain an owner or lessor from repossessing property.
The moratorium may, however, remain in place where a charge holder votes for a deed that, in its terms, restricts the charge holder from taking action to enforce the charge.
The administrator acts as an agent of the company. The director’s powers are suspended; however, in practice if the company continues to trade then the directors will often be retained to manage the day to day operations of the company. In this scenario, they are accountable to the administrators.
The administrators must call a meeting of creditors to be held within 8 business days of appointment. At that meeting, creditors are allowed to replace the administrator and appoint a committee of creditors, who act to assist the administrator in the performance of his or her duties.
The administrator must call a second meeting of creditors to be held within 25 business days of appointment. This period is often extended by application to the Court in large or complex Voluntary Administrations.
Prior to the second meeting of creditors, the Administrator must investigate the affairs of the company and report the results of his/her investigations to the creditors and Australian Securities and Investment Commission (“ASIC”).
During this period the administrator will also liaise with the directors to formulate a proposal, where possible, for the company to enter into a Deed of Company Arrangement (“DOCA”). The purpose of the proposal is to put to the creditors a plan to save the company and maximise the return to creditors, thereby preventing the winding up of the company.
Once a proposal has been formulated, the administrator will prepare a report to creditors, detailing his or her investigations and a recommendation on whether s/he thinks the creditors should accept or reject the proposal. Creditors will then be asked to decide whether to accept the proposal at the second meeting.
The administrator is personally liable for debts of the company incurred in the performance of the administrator’s functions and powers (for services rendered, goods bought and property hired, leased, used or occupied by the company), but is entitled to a right of indemnity out of the company’s property for that liability: ss443A and 443B.
The administrator will therefore need to be satisfied that the company has sufficient free assets to meet the statutory indemnity and/or has an agreement with the principal creditors to the effect that the administrator’s liabilities will be met.
The administrator is not taken to have adopted existing agreements. Suppliers of essential services (electricity, gas, water or a telecommunication service) are specifically prohibited from insisting on the payment of arrears as a condition of further supply: s600F.
Where the company entered into an agreement, prior to the Voluntary Administration, to use the property that someone else owns or leases, the administrator has five business days to decide whether or not to continue to use the property. Unless the administrator gives a notice to the owner or lessor of the property within five business days after the beginning of the Voluntary Administration, the administrator will be personally liable for amounts due under the agreement while she/he uses or keeps possession of the property or goods
The administrator is entitled to an indemnity out of the company’s property for remuneration and personal liabilities incurred during the Voluntary Administration period. The indemnity has priority over debts of the company secured by a floating charge on property, unless the chargee has either commenced enforcement of or actually enforced the charge before the Voluntary Administration began.
Where there is a doubt as to whether enforcement of the security would realise sufficient sums to repay the secured debt, putting together a Deed of Company arrangement with the co-operation of the directors and the other creditors may result in a better outcome for the secured creditor.
However, the ‘floating charge’ element of the charge may be depleted during the Voluntary Administration, as the administrator has an indemnity for remuneration and debts incurred during the Voluntary Administration that outrank the company’s unsecured and secured debts in priority.
The administrator of a company may be removed by resolution of the creditors at the first meeting of creditors. This meeting must be held within eight business days after the Voluntary Administration begins.
The cost of appointing an administrator will vary depending upon the circumstances of your company. You can determine the approximate price by calling today for a free initial consultation. During this free consultation you will be asked a series of questions. Our consultant will gain a thorough understanding of the amount of work required to conduct the administration and will be able to advise you of the costs involved.
We offer free consultations so you will be able to talk to a professional before you spend any money. We aim to take the stress out of this process and we have found that offering free consultations is a great way to help out. To arrange a free consultation – you can call us today on 1300 60 70 60.
We are committed to providing an industry-leading administrator at a fixed price. At your initial free consultation with us, we will determine the financial situation of your company and provide you with a choice of administrators from our expert panel. Following your first consultation, our team will provide you with a quote for a fixed price in writing, meaning you will only ever have to pay one affordable sum for the appointment of a highly qualified administrator.
Once the administrator has been appointed, our VA team can guide you through the entire process, taking care of everything and removing all stress and responsibility from your shoulders. We will: take care of all necessary paperwork; negotiate with creditors on your behalf; act as your representative at all creditors meetings and other important consultations; help prepare and present your DOCA; assist with all required documentation should liquidation be required; act as your first and only point of contact for any queries or concerns. You won’t find such a high quality, stress-relieving service for such a low price anywhere else.