Corporate Insolvency

There are various forms of formal administrations available to directors of companies experiencing financial challenges.

At Cor Cordis, we have the expertise and experience to help directors understand and implement the best options available for their particular circumstance.

Acting early minimises the impact on all stakeholders.

Voluntary Administration

The Voluntary Administration process is an invaluable tool for a company facing financial challenges as it is a viable alternative to it being wound up.

The major benefits of the Voluntary Administration process are:

  • The appointment of Administrators by the Company’s Directors can be quickly and easily made for all they need to do is pass a resolution that the Company is insolvent or likely to become insolvent and Cor Cordis will assist with the appointment process.
  • By appointing a Partner of Cor Cordis, control of the Company is given to an independent person.
  • It places a freeze on unsecured creditors’ claims which allows directors “breathing space” to consider a proposal to creditors and other stakeholders as an alternative to winding up the Company. There are exceptions however for secured creditors who have 13 days after being notified of the appointment of administrators, to exercise their rights under their security.
  • Owners and lessors (including landlords) of property are prevented from taking action during the administration period.
  • The company can continue to trade during the administration period.

Deed Of Company Arrangement

The proposal under the Deed of Company Arrangement (DOCA) must give creditors a better return than a liquidation scenario.
The Directors formulate a proposal during the Voluntary Administration period and the Administrators put forward the proposal to the creditors and recommend to the creditors whether the DOCA proposal is in the best interest of creditors.

The benefit of a DOCA is that subject to creditors’ approval, the Company is not wound up and a satisfactory return has been achieved for the benefit of all stakeholders.

The approval by creditors of a DOCA is binding on all stakeholders.

The Partners of Cor Cordis have acted as Deed Administrators for various companies in achieving this.

Creditors Voluntary Liquidation

A Company can be placed into Creditors Voluntary Liquidation in the following circumstances:

  • Voluntarily by directors and shareholders due to the insolvency of the Company.
  • By creditors where a Deed of Company Arrangement proposal has been rejected by creditors in a voluntary administration.

The appointment of a liquidator allows an independent person to investigate the affairs of the company.

The Partners of Cor Cordis have accepted appointments as liquidators of many companies.

Official Liquidation

This appointment is made by way of an application by a creditor to the Federal and Supreme Courts and the Partners of Cor Cordis have regularly acted in these types of appointments.

The application is normally as a result of the Company failing to comply with the statutory demand of the creditor.

The appointment of the official liquidator allows an independent person to take control of the company’s assets and investigate the affairs of the Company, including recovery / legal actions against directors for insolvent trading and other creditors in respect of voidable transactions.

Provisional Liquidation

This type of appointment is also made by way of application to the Federal or Supreme Courts however, it is a special type of appointment where there is some concern for the protection of a company’s assets.

The appointment of a provisional liquidator again allows the appointment of an independent person to control of the Company and secure its assets.

The affairs of the Company are investigated and the Provisional Liquidator reports their findings to the court upon which subject to the findings, the court may return the Company to the control of it’s directors or appoint an official liquidator.

Receivership

A secured creditor (bank or other financier) usually appoints a controller, receiver and manger or agent for the mortgagee (Receiver) to a company to realize that company’s assets in order to repay the secured creditors’ debt.

The appointment is made pursuant to the secured creditor’s security documentation, in the main debenture charges and mortgages.

The Partners of Cor Cordis have significant experience in receivership appointments and making returns to secured creditors.

Members Voluntary Liquidations

This form of appointment is commonly used by shareholders of solvent companies as a mechanism to free themselves of corporate structures no longer required by them.

The liquidator is appointed at a general meeting of shareholders where a special resolution is passed to wind up the company.

The role of the liquidator is to realize the company’s assets, pay any creditor’s claims (must be done within 12 months of appointment) and return surplus funds to shareholders.