Voluntary Administration Lawyers in Melbourne

Breathing space with a hard end date

If your company is under creditor pressure and you are weighing up voluntary administration, the thing worth knowing early is that it works far better as a choice than as a last resort. Appoint an administrator while there is still a business worth saving and you get a moratorium, a negotiating table, and a deed proposal creditors might actually accept. Appoint one on day 20 of a statutory demand and you have usually just bought a short pause before the liquidation.

We advise directors on whether to appoint, act for creditors caught in someone else’s administration, and negotiate deeds of company arrangement on both sides. Where an administrator is the wrong tool for what you are facing, our insolvency lawyers will say so on the call and point you at the one that fits. The first call to 1800 130 120 is free, and if a deadline is running we take it the same day.

What happens, week by week

The directors resolve that the company is insolvent or likely to become insolvent, and appoint a registered administrator. From that moment most creditor claims, court proceedings and lease enforcement are frozen. The administrator must hold a first creditors’ meeting within 8 business days. Then comes roughly a month in which the administrator investigates the company and reports to creditors, before the second, deciding meeting is called.

At the second meeting creditors choose one of three outcomes: hand the company back to the directors, accept a deed of company arrangement, or put the company into liquidation. From appointment to that vote is five to six weeks, and that is the whole window you have to build a rescue in. It is why the deed proposal wants to be taking shape well before the appointment.

Directors: what you get, and what you still carry

The moratorium is mostly there to protect the company, but one part of it protects you. Personal guarantees of company debt cannot be enforced against a director or their spouse while the administration runs. Suppliers and financiers also generally cannot terminate a contract just because an administrator was appointed.

You still carry the guarantee liability once the administration ends, any lockdown Director Penalty Notice, and insolvent trading exposure for debts the company has already incurred. A well-built DOCA handles the guarantees as part of the deal. Our director liability page covers the rest, and if the company’s liabilities are under $1 million we will also test whether small business restructuring gets you to the same place with you still in control.

Creditors: do not let the vote happen without you

If a customer of yours has gone into administration, you have a few weeks to protect your position. Lodge your proof of debt, attend or send a proxy to both meetings, and scrutinise the deed proposal before voting. A DOCA return of a few cents in the dollar is not automatically better than liquidation, because liquidation brings claw-back recoveries and public examinations that a deed usually switches off. Where a deed unfairly favours insiders, we challenge it in the Federal Court.

Talk it through before you resolve anything

Call 1800 130 120 or use the form on this page. Bring the numbers you have: what the company owes, who holds security, and what the ATO position is. You will finish the call knowing whether administration, restructuring or a creditors’ voluntary liquidation fits, and what to do first. The first call is free, including evenings and weekends.