Some of the implications of a Voluntary Administration include:
- The period of Voluntary Administration is generally between 25 and 30 business days
- Creditors are unable to take action to remedy debts in default
- Proceedings commenced by creditors in Court are stayed until after the Voluntary Administration period
- During the period of the Voluntary Administration, the directors do not have control of the operations of the company
- The Administrators assume control of the company and have personal liability for trading and other expenses that they authorise
- Directors are provided with an opportunity to consider the terms of any proposal for a Deed of Company Arrangement to be submitted to creditors to enable the business operations to continue past the period of the Voluntary Administration
- The Administrators conduct detailed investigations into the company’s affairs and report on their findings. The Administrators will consider the proposal for a Deed of Company Arrangement and make a recommendation to creditors
- The Administrators will hold a meeting whereby creditors will consider and vote on the future of the company at which one of the following resolutions is passed:
- Control of the company is reverted to the directors;
- The company enters into a Deed of Company Arrangement; or
- The company is placed into liquidation.
The Voluntary Administration process is also available for use by directors as a process to placing a company into liquidation where it is not possible to pass a special resolution of shareholders for a creditors’ voluntary liquidation.
Our experts at Artemis Insolvency have extensive experience with Voluntary Administrations.
Contact Artemis to discuss further the options available to you in relation to Voluntary Administrations.