Australia—voluntary administration

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Australia—voluntary administration
  • Introduction
  • Administrator
  • Effect of appointment
  • First meeting of creditors
  • Second meeting and ending of administration
  • Deed of company arrangement (DOCA)
  • Variation and termination of DOCA
  • General powers of court
  • Transition to voluntary winding up
  • More...

Australia—voluntary administration

Introduction

Part 3A of the Corporations Act 2001 (Cth) (CA 2001) was introduced in 1993 to provide for the business, property and affairs of an insolvent company to be administered in a way that:

  1. maximises the chances of the company, or as much as possible of its business, continuing in existence, or

  2. if it is not possible for the company or its business to continue in existence—results in a better return for the company’s creditors and members than would result from an immediate winding up of the company

Administrator

An administrator (or administrators) can be appointed in writing by:

  1. the company itself where the directors have resolved both that the company is insolvent or is likely to become so at some future time and that an administrator should be appointed,

  2. a liquidator or provisional liquidator who believes the company is insolvent or likely to become so at some future date, or

  3. a secured party holding a security interest over the whole or substantially the whole of the company’s property, if the interest has become and still is enforceable and if a liquidator or provisional liquidator has not been appointed

Effect of appointment

The powers of officers of the company (including a provisional liquidator) are suspended upon the appointment of an administrator, except with his or her written approval or the approval of the court. However, the directors retain

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