Services for Insolvent Companies

You may be in a situation where your company or your client’s company are experiencing cash flow challenges, problems paying the company’s creditors on time, or even being unable to pay money the company owes to others. There are various options available for companies that are or might be insolvent. Some of these options are listed below.

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A Voluntary Administration (also known as a VA) occurs when directors of a company recognise their business is in financial difficulty and appoint an external administrator to take control of the company and its affairs.

Typically, the process is for a period of 28 days, after which the creditors decide the company’s future.

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A deed of company arrangement (DOCA) is a formal contract between the company and its creditors with a view to resolving the company’s financial difficulties. A deed of company arrangement will be drawn up as a result of a company entering voluntary administration.

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A Creditors Voluntary Liquidation (also known as a CVL) occurs when the company’s members determine that the company can no longer satisfy its debts and is likely to become insolvent or is insolvent.

The aim of the liquidator in this process is to sell the company’s assets and distribute the proceeds to creditors and shareholders before the company is liquidated or ‘wound up’.

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A simplified liquidation is a streamlined process for CVL in a cost-effective way. It has been designed to reduce the cost and time involved in liquidating a company with liabilities of less than one million dollars.
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The Small Business Restructuring Process (SBR) was introduced by the Federal Government during the COVID-19 crisis in 2021 for companies that are unable to pay their debts in full.

This option enables directors to remain in control of the company under the supervision of an SBR Restructuring Practitioner. During the SBR process, directors and the company have time to put forward a plan to creditors to pay off their liabilities (usually of less than 100 c/$) within a period not exceeding three years.

How can we help?

If your company or your client’s company have been experiencing financial problems or keeping debts under control, we can help.

We can meet with you or your client to discuss whether any of the above options are suitable for you or your client to ensure the best possible outcome.

We can assist in providing you with guidance on initiating the option that suits you or your client the most and can act as either a liquidator, voluntary administrator or a Restructuring Practitioner of the company.

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