The Voluntary Administration process provides an effective and efficient means of dealing with a company in financial difficulty and providing a mechanism for its rehabilitation.

The aim of the Voluntary Administration procedure is to maximise the chance of a company, or as much as possible of its business, continuing in existence.

When a Voluntary Administrator is appointed to a company, the Voluntary Administrator assumes control of the company’s assets during an interim investigation period that usually lasts 28 days.  At the end of this period, the Administrator makes a recommendation to creditors as to which of three options the Administrator believes is in the creditors’ best interests, namely, that the company should either:

§  enter into a Deed of Company Arrangement or

§  be wound up Creditors Voluntary Liquidation; or

§  be returned to the control of the company’s directors.

The creditors then decide the company’s future by voting, with the benefit of a report from the Administrator on the company’s situation and prospects, and with the Administrator’s analysis of the most appropriate way forward.

Where a Deed of Company Arrangement is approved by creditors, the Voluntary Administrator usually becomes the Deed Administrator.  A Deed of Company Arrangement is very flexible on terms and may include a compromise or moratorium on creditors’ debts, or a combination of both.  A Deed of Company Arrangement does not require Court approval and may be agreed to by a simple majority of creditors at the meetin