When can a contractor or a lessor gain access to their possessions on-site during liquidation
Access may be approved pursuant to the requirements of the appointee and provided your PPSR obligations having been met. Please refer to information on our website found here.
When do creditors receive payment
If there are funds left over after payment of the costs of the liquidation plus payments to other priority creditors, including employees, the liquidator will pay these to unsecured creditors as a dividend. Generally, the order in which funds are distributed is:
1. costs and expenses of the liquidation, including Liquidator’s fees
2. outstanding employee wages and superannuation
3. outstanding employee leave of absence (including annual leave, sick leave where applicable, and long service leave
4. employee retrenchment pay
5. unsecured creditors
If you have a query regarding the calculation of your claim or the timing of the payment, please call the office on 08 8231 3323 and ask to speak with the Manager involved with the relevant company.
What are the implications of bankruptcy
Please refer to the Bankruptcy information on this website.
What are the advantages of Administration over immediate Liquidation?
The creditors are included in the process and within a month after the appointment of an Administrator, there are two meetings with creditors. Creditors learn what is happening, whereas previously in court liquidations, a creditors' meeting might not be held until months after the appointment of a Liquidator. In the Voluntary Administration (VA) process creditors are included, and included early.
Who do Voluntary Administrators represent in an administration?
Whilst an Administrator may have been appointed by the Directors of a company, the Administrator represents the interests of the creditors of the company. An Administrator is independent of the Directors. Macks Advisory believes this must be brought to the attention of the Directors before the appointment, so that there are no misunderstandings.
What is the market reaction to a company going into voluntary administration?
Most creditors are supportive of the VA process. If proposals from Directors of companies are apparently achievable, administration is regarded by creditors as a better option than liquidation because they are likely not only to receive higher dividends, but have retained an on-going customer.
What is the benefit of a Voluntary Administration - is it a cost advantage?
The Voluntary Administration (VA) regime enables a mechanism for staying creditors’ actions and winding up proceedings whilst reconstruction and rehabilitation strategies are implemented. Certainly cost is an issue. A Voluntary Administrator does not have to deal with many matters imposed upon a Liquidator and as a consequence, reflects favourably on costs. But the flexibility of a VA is its main virtue, offering opportunities for companies to survive long term for the benefit of directors and creditors. Similarly, if it's apparent a company can't survive long term, then the flexibility available in VA would mean the company's assets could be handled in such a way as to achieve the best possible financial result for both it and its creditors. Regulatory requirements of liquidators generally prove to be costly for companies one way or another.
What happens to a company’s bank accounts in a Voluntary Administration?
All bank accounts are frozen. Where there are no funds to pay off overdrafts, interest will continue to accrue. An Administrator would open a new bank account in the name of the company, but would include in the title of the account "Administrator Appointed". The Administrator then deposits all monies received into this new bank account.
Does the Voluntary Administration process apply to a company which acts as a Trustee?
Yes. As Voluntary Administrator of a company which is trustee for a trust, the Administrator is able to control the trust’s assets. A general proposition of law is that a trustee of a trust has a right of indemnity against the trust assets.
Can Voluntary Administrations be used for Partnerships?
No. A partnership is not a corporate entity and VA’s relate only to companies under the Corporations Act. However the VA process is very similar to the Part X principle of the Bankruptcy Act 1966, whereby individuals can come to arrangements with creditors so as to avoid bankruptcy. A similar arrangement philosophy governs the Voluntary Administration process.