2012 GUIDE TO CORPORATE INSOLVENCY

Size: px
Start display at page:

Download "2012 GUIDE TO CORPORATE INSOLVENCY"

Transcription

1 2012 GUIDE TO CORPORATE INSOLVENCY worrells.net.au

2 PLAIN TALK. STRAIGHT ANSWERS. FAST RESULTS. EDITOR Chris Cook, Partner Worrells Brisbane DISCLAIMER The enclosed information is of necessity a brief overview and it is not intended that readers should rely wholly on the information contained herein. No warranty express or implied is given in respect of the information provided and accordingly no responsibility is taken by Worrells or any member of the firm for any loss resulting from any error or omission within this brochure. Liability limited by a scheme approved under Professional Standards Legislation.

3 1 2 3 GLOSSARY CORPORATE INSOLVENCY 10 INDICATORS OF INSOLVENCY 12 LIQUIDATION 16 VOLUNTARY ADMINISTRATION 19 DEEDS OF COMPANY ARRANGEMENT 22 MEMBERS VOLUNTARY WINDING UP 23 PREFERENCES IN LIQUIDATIONS 25 INSOLVENT TRADING 28 UNREASONABLE DIRECTOR RELATED TRANSACTIONS 31 UNCOMMERCIAL TRANSACTIONS 33 SECTION 588FH PREFERENCES TO RELATED PARTIES 35 DIRECTOR S LIABILITIES FOR COMPANY DEBTS 39 ENDING A LIQUIDATION 44 RELATED TOPICS 46 PRIORITY EMPLOYEE ENTITLEMENTS 48 DIRECTOR PENALTY NOTICES 52 LENDING MONEY 58 SUBCONTRACTORS CHARGES 61 SECURITIES OVER ASSETS 63 SECURED APPOINTMENTS 65 DETERMINING INSOLVENCY 67 LANDLORD RIGHTS 71 WORRELLS ARTICLES 74 SET-OFFS: WHEN ARE THEY AVAILABLE? 76 NEVER NEVER SAY NEVER 77 SUPERANNUATION CLAIMS IN INSOLVENCY 78 RECEIVERS, LIQUIDATORS AND EMPLOYEE ENTITLEMENTS 80 ATO GARNISHEE NOTICES 82 VOLUNTARY DEREGISTRATION OF COMPANIES AND DIRECTOR PENALTY NOTICES BEWARE!!!! 83 AM I LIABLE FOR THE COMPANY TAX? 84 86

4 A WORD FROM IVOR It has been said that our free enterprises, capitalist economy is the worst system of all... except for all of the others. But that is of little consolation to those who stand to lose all, or most, of their capital as a result of business failure and it is of no help to employees and creditors of failed businesses, who are left wondering what happened and how they can make good their losses. Worrells cannot change the way in which our economic system works. But what we can do, and what we have been doing for many years, is to bring to the insolvency profession a level of transparency and access to relevant information which is unparalleled. This latest volume of Worrells Corporate Insolvency Guide and its companion volume Worrells Personal Insolvency Guide seeks to explain, in simple terms, how the insolvency laws and processes work, and by doing so to demystify the topic. This, we believe, will allow all stake holders to better understand and cope with what is, for many, an extraordinarily stressful episode. Worrells Corporate Insolvency Guide has been prepared drawing on the combined experience of our 15 partners, who between them have managed more than 12,000 insolvencies over the 38 years since the inception of Worrells Solvency and Forensic Accountants. Our aim has been to produce an easily understood Guide providing dependable information relevant to corporate insolvency. Each topic is set out in a question and answer format and is explained in non technical terms, yet has sufficient detail to allow the reader to gain a broad understanding of insolvency concepts and practice. We have included with this Guide a selection of interesting and illuminating articles taken from our popular monthly Plain Talk e-updates. Our Guides are designed to assist both debtors and creditors and to provide a quick reference resource to our legal, accounting and banking colleagues. Our Guides contain an accurate yet broad statement of insolvency law and practice as it stands at the date of publication. Yet, each insolvency is unique in some way and insolvency laws change, which is why we encourage readers to obtain formal accounting or legal advice or to contact any of the Worrells partners for a confidential and obligation free consultation. Insolvency law is not about punishing business owners for commercial misjudgements, or lack of information. It s about removing impossible financial burdens in fair and transparent ways. We believe that our Insolvency Guides help demystify the insolvency process and so help all stakeholders deal with the inevitable pressures that accompany business failure. We believe also that our commitment to transparency in all we do is nowhere better exemplified than through the information shown on our web site (worrells.net.au) where a wealth of general and information is provided along with detailed daily updates on each current insolvency which we are managing. No other insolvency firm in Australia comes close to the level of disclosure which has been a feature of our operations for some over ten years. And if you like the e-update articles included in this Guide you will find many more at our web page. Although the practice of insolvency involves the interpretation and application of regulation and legislation, although it s to do with balance sheets, ledgers and accounts, at its base it is really about people. Businesses may founder and companies may be liquidated, but it is people that pay the price and feel the pain. Each of Worrells partners, and all of our staff members, recognises that both debtors and creditors must be treated with respect and consideration and that open and frequent communication is the key to a successful relationship. On a daily basis we strive to live up to our slogan of Plain Talk, Straight Answers and Fast Results. We see the publication and distribution of our Insolvency Guides as a practical way of doing this. We welcome feedback regarding these publications including suggestions on how we can improve subsequent editions. Finally, on behalf of all of the Worrells partners I would like to thank you for taking the time to review Worrells 2012 Guide to Corporate Insolvency. Ivor Worrell Coordinating Partner WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

5 TRANSPARENCY AND INFORMATION ARE THE KEYS TO A FAIRER INSOLVENCY REGIME 3

6 WORRELLS PARTNERS IT S OUR PEOPLE THAT DELIVER PLAIN TALK, STRAIGHT ANSWERS AND FAST RESULTS. WORRELLS ARE A TEAM OF FULL TIME SPECIALISTS. SOLVENCY MANAGEMENT, RESTRUCTURE OR INSOLVENCY ADMINISTRATION CAN BE A PERIOD OF GREAT STRESS. AN EXPERIENCED AND SPECIALIST TEAM CAN EASE THE PROCESS, ENSURING A FAIR OUTCOME FOR ALL PARTIES CONCERNED. At Worrells we re specialists - Solvency Accounting is all we do. 15 Partners, 15 Official & Registered Liquidators, 12 Registered Trustees, 3 Certified Fraud examiners, 5 east coast major metro locations, we can have experienced staff at any location, quickly. Quick decisive action by a highly skilled team acting in a caring, respectful and fair manner does make all the difference. Established over 38 years ago, Worrells draws upon over 200 years of experience. Using proprietary technology, our team have successfully completed over 25,000 assignments. Specialist accounting services, delivered by dedicated fulltime specialists, on time, on budget every time. 4 WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

7 IVOR WORRELL BRISBANE FCA Official Liquidator Registered Trustee Member IPA Forensic Accountant Justice of the Peace RAJ KHATRI BRISBANE FCA Official Liquidator Registered Trustee Member IPA Commissioner of Declarations MORGAN LANE BRISBANE CA CPA (Fellow) Official Liquidator Registered Trustee Member IPA Justice of the Peace Ivor Worrell is a Registered Trustee in Bankruptcy and Official Liquidator. Ivor is a leading Queensland insolvency practitioner and in a career spanning 38 years he has developed experience in Corporate and Personal Insolvency, Receivership and Litigation Support. Raj Khatri joined the firm in 1986 rising to become a Partner in His area of specialty is Corporate Insolvency and has over 26 years experience in the field. Raj is a fellow of the Australian Institute of Chartered Accountants, an associate of the New Zealand Society of Accountants and the Institute of Corporate Managers, Secretaries and Administrators. Morgan Lane joined the firm in 1992 and became a full partner in His wealth of experience gained in both the private and public sectors adds further depth to our insolvency division. Morgan is a Fellow of CPA Australia accredited as a Specialist in Insolvency & Reconstruction, an Associate of the Institute of Chartered Accountants and The Institute of Corporate Manager, Secretaries and Administrators. 5

8 WORRELLS PARTNERS MICHAEL GRIFFIN BRISBANE CA Registered Liquidator Official Liquidator Registered Trustee Certified Fraud Examiner Member IPA Commissioner of Declarations Michael is a Registered Liquidator, Official Liquidator and a Registered Trustee in Bankruptcy. Michael is also a Member of the Institute of Chartered Accountants and the Insolvency Practitioners Association. Michael s experience includes all forms of personal and corporate insolvency matters. MICHAEL PELDAN BRISBANE FCA Registered Liquidator Official Liquidator Registered Trustee Certified Fraud Examiner Member IPA Commissioner of Declarations Michael joined the firm as a graduate in 1991 after completing studies as a mature-aged student, and became a full partner in July Michael s experience includes all aspects of Corporate and Personal Insolvency and Financial Investigation. Michael is also engaged in Fraud Awareness Management and Education and is one of the firm s Certified Fraud Examiners. CHRIS COOK BRISBANE CPA CA Registered Liquidator Official Liquidator Member IPA Commissioner of Declarations Chris is an Official Liquidator, Chartered Accountant, Certified Practising Accountant and a member of the Insolvency Practitioners Association of Australia. Chris joined the firm in February 1999 and has considerable experience in both the Corporate and Personal Insolvency Fields. Chris is the partner and heads a team that specialises in Corporate and Personal Insolvency. 6 WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

9 ADAM WARD IPSWICH CPA Registered Liquidator Official Liquidator Registered Trustee Member IPA Commissioner of Declarations Adam Ward joined the firm in 2001 and became a partner in Adam is a Registered Liquidator, Official Liquidator and is a member of both CPA Australia and the Insolvency Practitioners Association. His experience includes all forms of Corporate and Personal insolvency matters. Adam is the Partner that leads a team at our Worrells Ipswich Office. JASON BETTLES GOLD COAST CA Official Liquidator Registered Trustee Member IPA Commissioner of Declarations Jason is an Official Liquidator, Registered Liquidator, Registered Bankruptcy Trustee, Chartered Accountant and a member of the Insolvency Practitioners Association of Australia. He has worked exclusively in the field of insolvency since 1995, managing the Gold Coast Insolvency Division of a second tier accounting firm for two years before joining us in October Jason has experience in all forms of corporate and personal insolvency matters. He has provided recommendations on the most appropriate solutions to deal with insolvency issues to all types of parties. Jason s knowledge and experience allows him to consider informal arrangements to solve insolvency problems, as well as the formal insolvency administrations. PAUL NOGUEIRA SUNSHINE COAST CPA CA Registered Liquidator Official Liquidator Registered Trustee Member IPA Commissioner of Declarations Paul joined Worrells in 1999 after completing his degree with the Queensland University of Technology. He was appointed a Partner in 2006 and opened the Worrells Sunshine Coast office in Paul is experienced in all forms of Corporate and Personal insolvency administrations over various industries and specialises in small to medium business turnaround management and solvency solutions. Paul adheres to the firm s Plain Talk, Straight Answers, Fast Results approach and is available to provide no obligation advice to any party that may find themselves faced with solvency problems. 7

10 WORRELLS PARTNERS NICHOLAS MALANOS SYDNEY CPA Registered Liquidator Official Liquidator Registered Trustee Certified Fraud Examiner Member IPA CHRISTOPHER DARIN SYDNEY CA Registered Liquidator Official Liquidator Justice of the Peace STEPHEN HUNDY CANBERRA CA Registered Liquidator Official Liquidator Registered Trustee Member IPA Nick has in excess of 27 years experience in all aspects of corporate insolvency. He has particular expertise in the areas of Voluntary Administration and Deeds of Company Arrangement which has now enabled numerous businesses to successfully continue on over the years. Chris is a Registered Liquidator, Official Liquidator and associate member of the Institute of Chartered Accountants in Australia. Chris joined the firm as partner of the Sydney firm in July 2008 having been in practice on his own account since Chris experience includes all aspects of corporate insolvency and adopts a consultative approach when exploring all financial avenues available to a distressed company. Chris also undertakes corporate advocacy appointments, assisting directors and companies in dealing with their debtors, creditors and other insolvency practitioners. Stephen Hundy joined Worrells Solvency & Forensic Accountants in 2011 as a partner and leads our Canberra office. Stephen has worked exclusively in the insolvency industry since 1995 and is able to provide assistance in all areas of personal and corporate insolvency. Stephen specialises in the provision of clear practical commercial advice on a wide range of business issues for individuals and small to medium enterprises. He adopts a hands-on approach being involved in all aspects of an appointment. In addition, Stephen also has experience in preparing fraud and financial investigation reports, undertaking financial viability reviews and has assisted with shareholder and partnership disputes. 8 WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

11 PAUL BURNESS MELBOURNE CPA Official Liquidator Registered Liquidator Registered Trustee Certified Fraud Examiner Member IPA MATTHEW JESS MELBOURNE CPA Registered Liquidator Official Liquidator Registered Trustee Member IPA CON KOKKINOS MELBOURNE CPA Registered Liquidator Official Liquidator Paul Burness is a Certified Practising Accountant, an Official Liquidator and a Registered Trustee in Bankruptcy. He is also a member of the Insolvency Practitioners Association of Australia. Paul has considerable experience in all forms of Corporate and Personal Insolvency and Reconstruction, specialising in insolvency since graduating. Paul is the managing partner of the Melbourne firm. Matthew is an Official Liquidator and Certified Practising Accountant, who has considerable experience in the Insolvency, Commercial Accounting and Corporate Finance fields. Matthew s experience includes due diligence investigations, sale of business transactions, corporate reconstructions and financial turnarounds. Matthew has also completed the Advanced Insolvency Course with the Insolvency Practitioners Association of Australia. Con Kokkinos joined the Melbourne office on a full time basis in April Con has been a Liquidator since November 2001 and is a member of CPA Australia. Con brings with him over 15 years of insolvency experience with an emphasis in all aspects of corporate insolvency. 9

12 CORPORATE INSOLVENCY NUMBERS CONTINUE TO INCREASE, THAT S WHY AN UNDERSTANDING IN THIS AREA IS VITAL. WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

13 1 CORPORATE INSOLVENCY INDICATORS OF INSOLVENCY 12 LIQUIDATION 16 VOLUNTARY ADMINISTRATION 19 DEEDS OF COMPANY ARRANGEMENT 22 MEMBERS VOLUNTARY WINDING UP 23 PREFERENCES IN LIQUIDATIONS 25 INSOLVENT TRADING 28 UNREASONABLE DIRECTOR RELATED TRANSACTIONS 31 UNCOMMERCIAL TRANSACTIONS 33 SECTION 588FH PREFERENCES TO RELATED PARTIES 35 DIRECTOR S LIABILITIES FOR COMPANY DEBTS 39 ENDING A LIQUIDATION 44 11

14 1 INDICATORS OF INSOLVENCY INDICATORS OF INSOLVENCY OVERVIEW The Courts frequently assess whether or not a company or individual is insolvent and if so, when that insolvency started and when various stakeholders should have suspected it. This usually occurs when a liquidator commences a recovery action. It is also a critical factor for directors, when liquidators or creditors commence recovery actions for damages arising from insolvent trading or related claims. Some judges have developed a schedule of indicators of insolvency that are considered in the claim. These should be readily and frequently used by all parties concerned when considering whether a person or business is insolvent. This issue was discussed in detail in ASIC v Plymin (2003) 46 ACSR 126, with the Judge referring to a checklist of 14 indicators of insolvency. These indicators were identified as the following: 1. Continuing losses 2. Liquidity ration below 1 3. Overdue Commonwealth & State taxes 4. Poor relationship with present bank including inability to borrow additional funds 5. No access to alternative finance 6. Inability to raise further equity capital 7. Supplier placing the debtor on COD terms, other otherwise demanding special payments before resuming supply 8. Creditors unpaid outside trading terms 9. Issuing of post dated cheques 10.Dishonoured cheques 11. Special arrangements with selected creditors 12. Solicitors letter, summons(es), judgments or warrants issued against the company 13. Payments to creditors of rounded figures, which are irreconcilable to specific invoices 14. Inability to produce timely and accurate financial information to display the company s trading performance and financial position, and make reliable forecasts. These are discussed in more detail below. 1. CONTINUING LOSSES Not every business that makes a loss, or a series of losses, is insolvent. As long as working capital is available to meet those losses, insolvency can be avoided. Losses by themselves do not cause insolvency. Rather, insolvency is usually brought about by a combination of losses and insufficient working capital. This statement may seem obvious, however some people concentrate solely on the losses without considering the capacity to absorb those losses. On the other hand, one large loss or series of losses may illustrate a trend which counters any defence that expected future profits will overcome what otherwise might be a shortterm problem, and raises questions of whether working capital is truly sufficient to absorb those losses. When assessing insolvency, consideration should be given to working capital and the extent to which it can absorb trading or other losses. 2. LIQUIDITY RATIO BELOW 1 Liquidity is a measure of the extent that liquid assets are available to cover payable debts. The business s liquidity ratio is a comparison of its current assets and current liabilities. If the ratio is greater than 1, there are more current or liquid assets than current or payable debts and an indication that the business should be able to pay debts from available assets. If the ratio is less than 1, the reverse applies. Whilst the liquidity ratio provides a pointer to solvency, it is by no means conclusive. A liquidity ratio measures available assets at a specific point in time and does not factor in the dynamics of cash flow and whether current debt is actually payable at that particular time. A further difficulty is that the ratio is usually determined using funds in the bank, rather than allowing for funds that might be borrowed from the bank. Amounts such as unused overdraft facilities will need to be included in a consideration of solvency. It also does not take into account whether some current assets (stock and receivables) are truly liquid. Business owners should examine the reasons for a liquidity ratio that is less than 1 and determine whether action needs to be taken. 3. OVERDUE COMMONWEALTH AND STATE TAXES Many short-of-cash businesses regard the non-payment of taxes as the easiest way of saving some cash flow that may be essential to survival. They see it as borrowing the money from the government. Rationale being that unlike general lending terms; there are no application forms, no valuations, no bank fees to pay and no recourse of non-supply or repossession, and in the case of interest its application could be delayed and potentially negotiable. So is non-payment of tax commitments (GST or PAYG) a good indicator of insolvency? The short answer is, yes. Putting aside those who simply have an extreme aversion to paying tax, businesses will normally meet their obligations to the tax office by the due date or soon thereafter if they have the ability to do so. 12 WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

15 CORPORATE INSOLVENCY 1 In most cases those businesses that do not pay tax, cannot pay tax. Business owners need to carefully consider solvency whenever taxes remain unpaid. 4. POOR RELATIONSHIP WITH PRESENT BANK INCLUDING INABILITY TO BORROW FURTHER FUNDS Banks have a distinct advantage over the other creditors. The bank knows what funds are on hand and can analyse the flow of funds through the bank account. If the business has borrowed money from the bank, the business owners will usually have had to provide financial information from time to time. Usually none of this information is available to other creditors. A poor relationship with a bank usually stems from either: 1. the non-repayment of monies due to the bank, 2. the bank being placed in a position where it must regularly dishonour cheques, or 3. the bank s assessment of the financial position or management of the business. A strained relationship with a bank does not prove that the customer is insolvent, just as a good relationship is not proof of solvency. Cases occur where the bank is amongst the last to know of a customer s insolvency because the customer has operated within agreed limits with the bank, while not paying other creditors. Although a poor relationship may be the result of other factors, it may be the result of the bank s lack of confidence in the business and its solvency. Certainly if a bank refuses to advance further funds or calls up a loan or overdraft, the reasons for this needs to be established. Furthermore, the result of the bank refusing further funding may - and often will - cause insolvency. 5. NO ACCESS TO ALTERNATIVE FINANCE & 6. INABILITY TO RAISE FURTHER EQUITY CAPITAL Insolvency is determined on a cash flow basis - an ability to pay debts. This is reflected in the definitions contained in the Corporations Act (for companies) and the Bankruptcy Act (for individuals). An entity is insolvent if it cannot pay its debts as they fall due. The inability to pay debts is linked directly to the inability to obtain ready cash and to debts being due and payable. Three financing alternatives are available to businesses in need of cash: 1. The debtor can convert short-term debt to long term debt - repayable at a date in the future or intermittently over a period. If a debt is no longer due and payable it does not form part of a strict solvency calculation. But when creditors doing nothing to collect debts that are outside of agreed terms, it cannot be taken as an implied agreement to extend trading terms. 2. Businesses may borrow funds to be used to pay due debts. Essentially this is creating a new debt to pay an old debt. But care must be taken not to mislead the lender, even if the loan is to satisfy current debt and alleviate a current cash flow problem. If the entity eventually fails, the obtaining of the new loan may have consequences to the business owner or director. 3. The debtor can obtain funds in the form of equity capital. The Equity investor, while seeking an eventual return from profits, does not compete with the priority of repayments of debts. Potential equity investors, knowing that an eventual return may be delayed or uncertain, are likely to be diligent in reviewing the finances and prospects of the venture in an effort to be satisfied that the return is commensurate with the risk. Being unable to sufficiently convert a short-term debt to long term debt, or borrow money to overcome a cash crisis, or is unable to replace debt with equity to cure the lack of funds is a strong indicator that the business has at least a cash flow problem and is possibly insolvent - rather than simply suffering a cash flow problem that can be resolved in the short-term. If business owners cannot obtain funding from any of these sources to pay outstanding debts, they should at least suspect that they are insolvent. 7. SUPPLIERS PLACING THE DEBTOR ON COD, OR OTHERWISE DEMANDING SPECIAL PAYMENTS BEFORE RESUMING SUPPLY & 8. CREDITORS UNPAID OUTSIDE TRADING TERMS Creditors are the first to know that their invoices are not being paid on time. An efficient credit manager or business operator will have systems that identify overdue accounts and prompt collection action. Action may consist of collection letters or calls and may involve limiting further supply to a COD basis or ceasing supply entirely. Being placed on COD terms tells the customer that, at least temporarily, the supplier has no faith in the customer s ability to meet further credit commitments. Suspicion may be aroused when there are a range of creditors with outstanding accounts, that business must be insolvent. However, care must be taken to determine whether the business is just a habitual late payer of accounts, even when sufficient funds exist. Business owners have to determine whether debts are not being paid because there is no money to pay them or if there is another reason. INDICATORS OF INSOLVENCY 13

16 1 INDICATORS OF INSOLVENCY INDICATORS OF INSOLVENCY 9. ISSUING OF POST-DATED CHEQUES The issuing of a post-dated cheque for current debt is one of the classic signs of insolvency. It is also one of the major signs of optimism by both the debtor and the creditor that the money will be readily available when the cheque is presented. Understandably, some creditors take the receipt of a post-dated as a sign that their account will eventually be paid, but it must be remembered that the issuing of a post-dated cheque amounts to an admission by the debtor that there are insufficient funds to pay now. Whether it also amounts to a creditor extending the credit terms to the date shown on the cheque is far less certain. Solvent debtors very rarely issue post-dated cheques so these cheques (should) immediately raise suspicions of insolvency. A debtor who has a long history of issuing post-dated cheques is almost certainly insolvent and relies on future monies to pay current commitments. Comparatively, a debtor who infrequently resorts to post-dated cheques is more likely to be suffering a short-term cash flow problem rather than insolvency. 10. DISHONOURED CHEQUES Many post-dated cheques end up being dishonoured on presentation. The issuing of post-dated cheques often is sign of misplaced optimism and a strong indicator of insolvency. The dishonouring of a post-dated cheque sends a very clear message that the debtor s problems are more than simply a short-term cash flow problem. The dishonouring of a post dated cheque tells us that the debtor s cash flow is at best inadequate and that the debtor s bank has limited faith in the debtor arranging for funds to pay the account. Generally a cheque is dishonoured by the bank because there are insufficient funds available to cover the payment. Naturally on occasion, this can result inadvertently through no fault of the debtor. Accordingly the dishonour of one cheque or even a few cheques at the one-time should not necessarily be taken as clear evidence of insolvency. But when the debtor s bank repeatedly dishonours cheques the conclusion of insolvency is unavoidable. The lack of sufficient funds to cover cheques issued must equate to an inability to meet all debts when they fall due. That is the classic definition of insolvency. Business owners need to quickly establish why their cheques are being dishonoured, and determine whether they are still solvent or not. 11. SPECIAL ARRANGEMENTS WITH SELECTED CREDITORS & 13. PAYMENTS TO CREDITORS OF ROUNDED SUMS, WHICH ARE NOT RECONCILABLE TO SPECIFIC INVOICES Not all demands from creditors end in summons and judgments. If the debtor does not dispute the existence of the debt, but cannot arrange immediate payment, creditors demands may result in some form of repayment agreement. These repayment agreements usually allow for payments to be made over an extended period of time, and it is not unusual for the payments to be made in round dollar amounts. Entering into such an arrangement is an admission that the business cannot meet the full debt when due, otherwise the arrangement would not be necessary. It is not uncommon for such an arrangement to be completed as planned, with both parties satisfied with the outcome. Can a debtor cure its insolvency by negotiating extended payment terms with creditors? In our view the answer is yes, on the proviso that a clear agreement is made by the creditor to provide extended terms. Once the terms of a debt are extended, the full amount is no longer due and payable. Round payments may be made towards the reduction of a debt with the agreement of the creditor. But it is not unusual to find round amount payments being made without such an agreement. The payments are usually made in that fashion because the debtor cannot pay the debt in full and that the debtor is no longer confident of negotiating extended arrangements with creditors and hopes to obtain extended credit terms by making part-payment. This debtor is almost certainly insolvent. If business owners are shuffling the small amount of cash that they have to pay the large amount of debts outstanding, they are almost definitely insolvent. 12. SOLICITORS LETTERS, SUMMONS(ES), JUDGMENTS OR WARRANTS ISSUED AGAINST THE COMPANY. A single letter of demand from a creditor or their solicitor is not proof of insolvency, as there may be a dispute between the parties. A series of demands from a number of solicitors, however, should create a strong presumption of insolvency. It would be unusual for a business to have several of disputes with their suppliers at the same time. If the creditor progresses beyond the demand stage and obtains a judgment that remains unpaid, the presumption of insolvency is all but confirmed. When execution of the judgment is undertaken by the creditor, a state of insolvency is certain. 14 WORRELLS SOLVENCY & FORENSIC ACCOUNTANTS WORRELLS.NET.AU

A PRACTICAL GUIDE TO CORPORATE INSOLVENCY

A PRACTICAL GUIDE TO CORPORATE INSOLVENCY A PRACTICAL GUIDE TO CORPORATE INSOLVENCY A COURTESY GUIDE PREPARED BY SWAAB ATTORNEYS 2014 Insolvency Under section 95A of the Corporations Act 2001 (Cth), an insolvent company is one which is unable

More information

Insolvency: a guide for directors

Insolvency: a guide for directors INFORMATION SHEET 42 Insolvency: a guide for directors This information sheet provides general information on insolvency for directors whose companies are in financial difficulty, or are insolvent, and

More information

Insolvency: a guide for directors

Insolvency: a guide for directors INFORMATION SHEET 42 Insolvency: a guide for directors This information sheet provides general information on insolvency for directors whose companies are in financial difficulty, or are insolvent, and

More information

INSOLVENCY AND AVAILABLE OPTIONS

INSOLVENCY AND AVAILABLE OPTIONS INSOLVENCY AND AVAILABLE OPTIONS Corporations Act 2001 - Section 95A 95A Solvency and insolvency (1) A person is solvent if, and only if, the person is able to pay all the person's debts as and when they

More information

Guide For Directors Of Insolvent Companies In The Cayman Islands

Guide For Directors Of Insolvent Companies In The Cayman Islands Guide For Directors Of Insolvent Companies In The Cayman Islands This guide provides general information on insolvency for directors whose companies are in financial difficulty, or are insolvent. Any queries

More information

Insolvency: a glossary of terms

Insolvency: a glossary of terms INFORMATION SHEET 41 Insolvency: a glossary of terms This is a brief explanation of some of the terms you may come across in company insolvency proceedings. Please note that this glossary is for general

More information

Insolvency: a glossary of terms

Insolvency: a glossary of terms Insolvency: a glossary of terms This is a brief explanation of some of the terms you may come across in company insolvency proceedings. Please note that this glossary is for general guidance only. Many

More information

DIFFERENT FORMS OF ADMINISTRATION IN CORPORATE INSOLVENCY. by Mark Doble, Partner

DIFFERENT FORMS OF ADMINISTRATION IN CORPORATE INSOLVENCY. by Mark Doble, Partner DIFFERENT FORMS OF ADMINISTRATION IN CORPORATE INSOLVENCY by Mark Doble, Partner 7 MAY 2013 1 OVERVIEW 1. In this paper I address the three most common types of administration of insolvent corporations.

More information

Receivership: a guide for creditors

Receivership: a guide for creditors INFORMATION SHEET 54 Receivership: a guide for creditors If a company is in financial difficulty, a secured creditor or the court may put the company into receivership. This information sheet provides

More information

A GUIDE TO COMPANY INSOLVENCY & LIQUIDATION

A GUIDE TO COMPANY INSOLVENCY & LIQUIDATION A GUIDE TO COMPANY INSOLVENCY & LIQUIDATION P: (09) 551 3631 E: admin@norrie.co.nz W: norrie.co.nz Contents Introduction... 2 Definitions... 3 Meaning of Board... 3 Meaning of director... 3 Meaning of

More information

Insolvency: a guide for shareholders

Insolvency: a guide for shareholders INFORMATION SHEET 43 Insolvency: a guide for shareholders If a company is in financial difficulty, it can be put under the control of an independent external administrator. The role of the external administrator

More information

Liquidation: a guide for creditors

Liquidation: a guide for creditors Liquidation: a guide for creditors If a company is in financial difficulty, its shareholders, creditors or the court can put the company into liquidation. This information sheet provides general information

More information

Winding Up Part 11 of the Draft Companies Bill. Brendan Cooney Partner

Winding Up Part 11 of the Draft Companies Bill. Brendan Cooney Partner Winding Up Part 11 of the Draft Companies Bill Brendan Cooney Partner Contents of Presentation Part 11: Winding Up 1. Chapter 1 Preliminary and Interpretation 2. Chapter 2 Winding Up by the Court 3. Chapter

More information

Restructuring & Insolvency. Liquidation

Restructuring & Insolvency. Liquidation Restructuring & Insolvency Liquidation What and why? Liquidation is a procedure used to bring a company s existence to an end where: it has insufficient assets to satisfy all of its liabilities; or though

More information

Pacific NonWovens (Australia) Pty Limited (Administrators Appointed) ACN 163 768 474 (the Company)

Pacific NonWovens (Australia) Pty Limited (Administrators Appointed) ACN 163 768 474 (the Company) 18 May 2015 Circular to Employees Dear Sir/Madam Pacific NonWovens (Australia) Pty Limited (Administrators Appointed) ACN 163 768 474 (the Company) Stewart McCallum and I were appointed joint and several

More information

PRE-LEGAL & LEGAL PROCEDURES FOR DEBT RECOVERY (SA)

PRE-LEGAL & LEGAL PROCEDURES FOR DEBT RECOVERY (SA) PRE-LEGAL & LEGAL PROCEDURES FOR DEBT RECOVERY (SA) M A R S H A L L S Solicitors Level 10 111 Gawler Place Adelaide 5000 Telephone: (08) 8213 4000 GPO Box 648 Adelaide 5001 Facsimile: (08) 8213 4099 Email

More information

Liquidation: a guide for creditors

Liquidation: a guide for creditors INFORMATION SHEET 45 Liquidation: a guide for creditors If a company is in financial difficulty, its shareholders, creditors or the court can put the company into liquidation. This information sheet provides

More information

COURT APPOINTED LIQUIDATION. Offermans Parners Turnaround + Solvency Solutions 1

COURT APPOINTED LIQUIDATION. Offermans Parners Turnaround + Solvency Solutions 1 COURT APPOINTED LIQUIDATION Offermans Parners Turnaround + Solvency Solutions 1 COURT APPOINTED LIQUIDATION Liquidation is the process used to wind up a Company s affairs and bring its existence to an

More information

LEGAL GUIDE TO RECOVERING A TRADE DEBT

LEGAL GUIDE TO RECOVERING A TRADE DEBT LEGAL GUIDE TO RECOVERING A TRADE DEBT Howat Avraam Solicitors A: 154 160 FLEET STREET, LONDON, EC4A 2DQ T: 020 7884 9400 E: Matthew.Howat@hasolicitors.co.uk Unpaid invoicing is a fact of life for most

More information

Property Update February 2011

Property Update February 2011 The impact of insolvency on leases This is the final article in a series of three which considers the impact of insolvency on leases. As most tenants of commercial or retail premises are companies, we

More information

DEBT. Law guide - Debt, bankruptcy & liquidation

DEBT. Law guide - Debt, bankruptcy & liquidation DEBT Law guide - Debt, bankruptcy & liquidation Contents Bankruptcy... 3 Arrangements with debtor... 6 Alternatives to bankruptcy... 8 Liquidation... 10 Distribution of assets... 11 Alternatives to liquidation...

More information

INSOLVENT TENANTS OPTIONS FOR LANDLORDS

INSOLVENT TENANTS OPTIONS FOR LANDLORDS INSOLVENT TENANTS OPTIONS FOR LANDLORDS Contents 1 Tenant in Liquidation... 2 2 Tenant in Administration... 3 3 Tenant in Receivership... 3 4 Tenant in Company Voluntary Arrangement... 5 5 Tenant in Bankruptcy...

More information

Glossary of terms. Bond Quasi fidelity insurance needed by a person who acts as an insolvency practitioner.

Glossary of terms. Bond Quasi fidelity insurance needed by a person who acts as an insolvency practitioner. Glossary of terms Administration Order a) A Court order placing the company that is, or is likely to become, unable to pay its debts under the control of an administrator following an application by, inter

More information

DAVID THOMAS LTD GUIDE TO COMPANY INSOLVENCY

DAVID THOMAS LTD GUIDE TO COMPANY INSOLVENCY DAVID THOMAS LTD GUIDE TO COMPANY INSOLVENCY Ver 1 Feb 2015 Phone : 09-215-6893 07-576-8832 021-124-6689 Email: david@david-thomas.co.nz Introduction Welcome to our guide to liquidations. This guide is

More information

DIY MVL Workbook. 1800 246 801 svpartners.com.au. A company ceases to exist on deregistration. (s.601ad(1))

DIY MVL Workbook. 1800 246 801 svpartners.com.au. A company ceases to exist on deregistration. (s.601ad(1)) In the course of professional practice, practitioners may encounter instances where a solvent company is no longer required by its directors and members. Examples may include: A company is not operating.

More information

Insolvency & Debt Recovery Glossary of Terms

Insolvency & Debt Recovery Glossary of Terms Insolvency & Debt Recovery Glossary of Terms Administration An insolvency procedure in which an Administrator is appointed to attempt to rescue an insolvent company. It s designed to protect the company

More information

Corporate restructuring guidelines Insolvency

Corporate restructuring guidelines Insolvency Corporate restructuring guidelines Insolvency Prepared by: 1 Whitney Moore Published by: Irish Business and Employers Confederation 84-86 Lower Baggot Street Dublin 2 Date of publication: April 2010 Author:

More information

Deregistration and Winding up of Australian Companies

Deregistration and Winding up of Australian Companies Introduction Deregistration and Winding up of Australian Companies There can be a number of legal and commercial reasons to end the life of an Australian company. While the most obvious and common reason

More information

Voluntary administration: a guide for creditors

Voluntary administration: a guide for creditors INFORMATION SHEET 74 Voluntary administration: a guide for creditors If a company is in financial difficulty, it can be put into voluntary administration. This information sheet provides general information

More information

Information for shareholders of Arrium Limited (Administrators Appointed)

Information for shareholders of Arrium Limited (Administrators Appointed) Information for shareholders of Arrium Limited (Administrators Appointed) KordaMentha Restructuring 22 April 2016 What is Voluntary Administration? It is an insolvency procedure where the directors of

More information

Liquidation: a guide for employees

Liquidation: a guide for employees INFORMATION SHEET 46 Liquidation: a guide for employees If a company is in financial difficulty, its shareholders, creditors or the court can put the company into liquidation. This information sheet provides

More information

MODULE 4 WINDING UP A BUSINESS

MODULE 4 WINDING UP A BUSINESS MODULE 4 WINDING UP A BUSINESS PART OF A MODULAR TRAINING RESOURCE Commonwealth of Australia 2015. With the exception of the Commonwealth Coat of Arms and where otherwise noted all material presented in

More information

BANKRUPTCY. Offermans Parners Turnaround + Solvency Solutions 1

BANKRUPTCY. Offermans Parners Turnaround + Solvency Solutions 1 BANKRUPTCY Offermans Parners Turnaround + Solvency Solutions 1 BANKRUPTCY Bankruptcy is the process of administering the Estate of a person who is unable to pay their debts as and when they fall due (i.e.

More information

CREDITORS VOLUNTARY LIQUIDATION

CREDITORS VOLUNTARY LIQUIDATION CREDITORS VOLUNTARY LIQUIDATION Offermans Parners Turnaround + Solvency Solutions 1 CREDITORS VOLUNTARY LIQUIDATION Liquidation is the process used to wind up a Company s affairs and bring its existence

More information

APPENDIX B A CREDITORS GUIDE TO ADMINISTRATORS REMUNERATION SCOTLAND

APPENDIX B A CREDITORS GUIDE TO ADMINISTRATORS REMUNERATION SCOTLAND APPENDIX B A CREDITORS GUIDE TO ADMINISTRATORS REMUNERATION SCOTLAND This guide applies to all appointments on or after 6 April 2006. Any creditor requiring guidance on a case where the Insolvency Practitioner

More information

Liquidating an insolvent Jersey company

Liquidating an insolvent Jersey company Liquidating an insolvent Jersey company DECEMBER 2011 For more briefings visit mourantozannes.com This briefing is only intended to give a summary and general overview of the subject matter. It is not

More information

Wor rells solvency & F 2012/13 Guide to PersonAl insolvency or ensic AccountAnts sprin G 2 012 G uide to insolvency r ells

Wor rells solvency & F 2012/13 Guide to PersonAl insolvency or ensic AccountAnts sprin G 2 012 G uide to insolvency r ells 2012/13 GUIDE TO PERSONAL INSOLVENCY worrells.net.au PLAIN TALK. STRAIGHT ANSWERS. FAST RESULTS. Editor Chris Cook, Partner Worrells Brisbane DISCLAIMER The enclosed information is of necessity a brief

More information

Restructuring & Insolvency. Company receivers and managers

Restructuring & Insolvency. Company receivers and managers Restructuring & Insolvency Company receivers and managers Types of appointment Typically, a company receiver and manager is appointed out of court by a secured creditor under the powers contained in a

More information

Insolvency and. Business Recovery. Procedures. A Brief Guide. Compiled by Compass Financial Recovery and Insolvency Ltd

Insolvency and. Business Recovery. Procedures. A Brief Guide. Compiled by Compass Financial Recovery and Insolvency Ltd Insolvency and Business Recovery Procedures A Brief Guide Compiled by Compass Financial Recovery and Insolvency Ltd I What is Insolvency? Insolvency is legally defined as: A company is insolvent (unable

More information

Members Voluntary Liquidation. Appointment Package

Members Voluntary Liquidation. Appointment Package Members Voluntary Liquidation Appointment Package This package contains the necessary instructions and basic documentation to assist in the convening of a Members Meeting to enable a company to be placed

More information

Liquidation: a guide for employees

Liquidation: a guide for employees INFORMATION SHEET 46 Liquidation: a guide for employees If a company is in financial difficulty, its shareholders, creditors or the court can put the company into liquidation. This information sheet provides

More information

Company Insolvency Overview

Company Insolvency Overview February 2010 Introduction 1. This overview is a general information guide only to highlight the differences between the various types of external controllers over company assets. Creditors should seek

More information

GUIDANCE NOTES FOR DIRECTORS OF COMPANIES WHICH MAY BE MADE SUBJECT TO A FORMAL INSOLVENCY PROCEDURE. These notes are set out as follows: Page

GUIDANCE NOTES FOR DIRECTORS OF COMPANIES WHICH MAY BE MADE SUBJECT TO A FORMAL INSOLVENCY PROCEDURE. These notes are set out as follows: Page GUIDANCE NOTES FOR DIRECTORS OF COMPANIES WHICH MAY BE MADE SUBJECT TO A FORMAL INSOLVENCY PROCEDURE These notes are set out as follows: Page Introduction 1 Insolvency 1 The period up to the start of the

More information

Formalities. CROSS-BORDER HANDBOOKS www.practicallaw.com/restructurehandbook 159

Formalities. CROSS-BORDER HANDBOOKS www.practicallaw.com/restructurehandbook 159 Restructuring and Insolvency 2007/08 South Africa South Africa Leonard Katz, Edward Nathan Sonnenbergs www.practicallaw.com/0-234-3973 SECURITY AND PRIORITIES Formalities 1. What are the most common forms

More information

An Overview of UK Insolvency Procedures and the Considerations for Banks with an Insolvent Customer

An Overview of UK Insolvency Procedures and the Considerations for Banks with an Insolvent Customer An Overview of UK Insolvency Procedures and the Considerations for Banks with an Insolvent Customer November 2011 1 An Overview of UK Insolvency Procedures and the Considerations for Banks with an Insolvent

More information

Glossary of Terms: Insolvency and Restructuring

Glossary of Terms: Insolvency and Restructuring Glossary of Terms: Insolvency and Restructuring Administration Administration is the court supervised process by which a Licensed Insolvency Practitioner called an administrator takes control of an insolvent

More information

Business and Agri Loan Terms and Conditions

Business and Agri Loan Terms and Conditions October 2012 Thank you for choosing an ANZ loan. When you take out a loan, various terms and conditions apply to it. These are covered in this Terms and Conditions document and in your loan agreement.

More information

Overview of the English law administration procedure and practical guidance for creditors

Overview of the English law administration procedure and practical guidance for creditors Overview of the English law administration procedure and practical guidance for creditors Set out below is an overview of the administration procedure, together with some practical guidance on the steps

More information

FINANCIAL SERVICES. Services for Companies in Financial Difficulty

FINANCIAL SERVICES. Services for Companies in Financial Difficulty Services for Companies in Financial Difficulty Insolvency procedures are varied and complex and the sooner we are consulted, the more options are likely to be available. HBG understand the anxiety which

More information

Limited companies. Identifying a limited company. Liability for limited company debts. Information: formal insolvency proceedings.

Limited companies. Identifying a limited company. Liability for limited company debts. Information: formal insolvency proceedings. This fact sheet gives information about private limited companies. We will use the terms limited company and company for the rest of this fact sheet. We explain the responsibilities of limited company

More information

STATEMENT OF INSOLVENCY PRACTICE 3.3 (SCOTLAND)

STATEMENT OF INSOLVENCY PRACTICE 3.3 (SCOTLAND) STATEMENT OF INSOLVENCY PRACTICE 3.3 (SCOTLAND) TRUST DEEDS INTRODUCTION 1. A Trust Deed is a voluntary deed granted by a debtor whereby the debtor conveys all or part of his estate to a named Trustee

More information

Glossary of Terms - Hong Kong

Glossary of Terms - Hong Kong Glossary of Terms - Hong Kong Ad Valorem Fee Bankruptcy Ad Val, as it is known, was used to fund the operations of the Official Receiver's Office, but nowadays it goes into the general revenue. It has

More information

CONTENTS PART 1: GENERAL...4 PART 2: COMPANY VOLUNTARY ARRANGEMENTS...5 PART 3: RECEIVERSHIP...8 PART 4: WINDING UP...11 CHAPTER 1 GENERAL...

CONTENTS PART 1: GENERAL...4 PART 2: COMPANY VOLUNTARY ARRANGEMENTS...5 PART 3: RECEIVERSHIP...8 PART 4: WINDING UP...11 CHAPTER 1 GENERAL... INSOLVENCY LAW DIFC LAW No. 3 of 2009 CONTENTS PART 1: GENERAL...4 1. Title...4 2. Legislative Authority...4 3. Application of the Law...4 4. Date of enactment...4 5. Commencement...4 6. Interpretation...4

More information

Comparison of Corporate Insolvency Procedures

Comparison of Corporate Insolvency Procedures Comparison of Corporate Insolvency Procedures There are five categories of insolvency procedure for companies in England, Wales and Northern Ireland. These are: Company Voluntary Arrangement (CVA) Administration

More information

Corporate Insolvency in Ireland Dillon Eustace

Corporate Insolvency in Ireland Dillon Eustace Corporate Insolvency in Ireland Dillon Eustace Table of Contents Page 1. Mechanisms of Corporate Insolvency 1 2. Liquidation 1 3. Functions of the Liquidator 2 4. Liquidation and Creditors Rights 2 5.

More information

Duties of the directors of companies in financial difficulties. slaughter and may. October 2010

Duties of the directors of companies in financial difficulties. slaughter and may. October 2010 Duties of the directors of companies in financial difficulties slaughter and may October 2010 Contents 1. Introduction 01 2. Overview 01 3. Practical guidance 02 4. Common law, statutory and regulatory

More information

Financial Restructuring and Transactions IFT Information Note: No. 121. Introduction to Insolvency Processes Schemes of Arrangement and COMI shifting

Financial Restructuring and Transactions IFT Information Note: No. 121. Introduction to Insolvency Processes Schemes of Arrangement and COMI shifting INTRODUCTION This note is intended to act as an introduction to corporate insolvency procedures under the Insolvency Act 1986 (the Act ) (as amended by The Enterprise Act 2002) and otherwise together with

More information

MIA 7/2010 INSOLVENCY. Learning the Essentials of Corporate Liquidation. April 2010

MIA 7/2010 INSOLVENCY. Learning the Essentials of Corporate Liquidation. April 2010 MIA 7/2010 INSOLVENCY Learning the Essentials of Corporate Liquidation Liquidated d Co.. April 2010 Copyright April 2010 by the Malaysian Institute of Accountants ( MIA ). All rights reserved. Permission

More information

investment portfolio service

investment portfolio service investment portfolio service overview Cavendish is a specialist administrator of Self Managed Superannuation Funds (SMSFs). Our overriding business objective is to provide our clients the Trustees of the

More information

Insolvency and enforcement procedures in England & Wales

Insolvency and enforcement procedures in England & Wales Insolvency and enforcement procedures in England & Wales Contents Introduction...01 Company Voluntary Arrangement (CVA)...02 Scheme of Arrangement (Scheme)...05 Administration / Pre-pack Administration...08

More information

Your Responsibilities as a Director of a Company. www.moorestephenswa.com.au. Serious about Success

Your Responsibilities as a Director of a Company. www.moorestephenswa.com.au. Serious about Success Your Responsibilities as a Director of a Company www.moorestephenswa.com.au Serious about Success www.moorestephenswa.com.au Introduction As a director of a company you have numerous responsibilities.

More information

TAXATION - COMMON ISSUES FOR INSOLVENCY PRACTITIONERS. A paper presented by Helen Symon SC and Mark McKillop of the Victorian Bar 1

TAXATION - COMMON ISSUES FOR INSOLVENCY PRACTITIONERS. A paper presented by Helen Symon SC and Mark McKillop of the Victorian Bar 1 TAXATION - COMMON ISSUES FOR INSOLVENCY PRACTITIONERS A paper presented by Helen Symon SC and Mark McKillop of the Victorian Bar 1 Introduction - Tax liability of a representative of an incapacitated entity

More information

[Insert graphic] COMPANIES (INSOLVENCY AND RECEIVERSHIP) ACT 2009 (NO. 2 OF 2009)

[Insert graphic] COMPANIES (INSOLVENCY AND RECEIVERSHIP) ACT 2009 (NO. 2 OF 2009) [Insert graphic] COMPANIES (INSOLVENCY AND RECEIVERSHIP) ACT 2009 (NO. 2 OF 2009) 3 [Insert graphic] COMPANIES (INSOLVENCY AND RECEIVERSHIP) ACT 2009 (NO. 2 OF 2009) PASSED by the National Parliament

More information

Bermuda Winding-Up Procedures

Bermuda Winding-Up Procedures Bermuda Winding-Up Procedures Foreword The following is a summary of the law and procedure under the Companies Act 1981 ("the Act") in so far as it relates to liquidations of companies in Bermuda. The

More information

DSA. Guide to a Debt Settlement Arrangement

DSA. Guide to a Debt Settlement Arrangement nseirbhís Dócmhainneachta na héirea DSA Guide to a Debt Settlement Arrangement n Insolvency Service of Ireland A Debt Settlement Arrangement enables an eligible insolvent debtor to reach agreement with

More information

Personal Loan Contract

Personal Loan Contract GE Money Personal Loan Contract Terms & Conditions GE imagination at work Contents What we lend and when 1 The annual interest rate 2 Interest charges 2 Repayments 3 Early repayment 3 Fees and charges

More information

A BASIC GUIDE TO INSOLVENCY PROCEEDINGS. 1. The Transfer of Undertakings (Protection of Employment) Regulations

A BASIC GUIDE TO INSOLVENCY PROCEEDINGS. 1. The Transfer of Undertakings (Protection of Employment) Regulations A BASIC GUIDE TO INSOLVENCY PROCEEDINGS 1. The Transfer of Undertakings (Protection of Employment) Regulations ( TUPE ) are notoriously difficult to interpret. This is partly because they refer to other

More information

Liquidations and Receiverships

Liquidations and Receiverships Liquidations and Receiverships Legal Guide 2 0 1 5 NEW PLYMOUTH 1 Dawson Street Private Bag 2013 Phone (06) 768-3700 Fax (06) 768-3701 INGLEWOOD 92 Rata Street PO Box 28 Phone (06) 756-8118 Fax (06) 768-3701

More information

Collection Manual Liquidation of Companies and other Company Law issues

Collection Manual Liquidation of Companies and other Company Law issues Collection Manual Liquidation of Companies and other Company Law issues Updated June 2014 CONTENTS 1 Introduction...3 2 What is Liquidation?...3 3 When is it appropriate to seek liquidation of a company?...3

More information

STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS. Produced by the IVA FORUM

STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS. Produced by the IVA FORUM Protocol Annex 4 STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS Produced by the IVA FORUM Revised November 2013 For use in proposals issued on or after 1 January 2014 TABLE OF CONTENTS FOR STANDARD

More information

LAWCASTLES TECHNICAL PAPERS

LAWCASTLES TECHNICAL PAPERS LAWCASTLES TECHNICAL PAPERS PAPER NO. 1 OF 2006 Statutory Corporate Insolvency Procedures in Tanzania Introduction This paper reviews statutory corporate insolvency procedures in Tanzania. The paper discusses

More information

A Creditor s Guide to Voluntary Liquidation in Hong Kong

A Creditor s Guide to Voluntary Liquidation in Hong Kong A Creditor s Guide to Voluntary Liquidation in Hong Kong Creditors Voluntary Liquidation Creditors voluntary liquidation occurs when shareholders put a company into liquidation because it is insolvent,

More information

Business Debtline www.businessdebtline.org 0800 0838 018

Business Debtline www.businessdebtline.org 0800 0838 018 BUSINESS DEBTLINE Business Debtline www.businessdebtline.org 0800 0838 018 DEALING WITH DEBTS OF A LIMITED COMPANY FACT SHEET NO. 5 NORTHERN IRELAND This fact sheet gives information about private limited

More information

A guide to creditors voluntary liquidations

A guide to creditors voluntary liquidations A guide to creditors voluntary liquidations Introduction A company can be put into liquidation voluntarily, at the instigation of its directors, or compulsorily, by order of the Court. The effect, in either

More information

FACT SHEET Is a Self-Managed Superannuation Fund the right option for me?

FACT SHEET Is a Self-Managed Superannuation Fund the right option for me? FACT SHEET Is a Self-Managed Superannuation Fund the right option for me? Prepared by Brett Griffiths, Director Superannuation Consulting e bgriffiths@vincents.com.au IS A SELF MANAGED SUPERANNUATION FUND

More information

Compulsory liquidation. a guide for unsecured creditors. Association of Business Recovery Professionals

Compulsory liquidation. a guide for unsecured creditors. Association of Business Recovery Professionals Compulsory a guide for unsecured creditors Association of Business Recovery Professionals Compulsory occurs when a company is wound up by an order of the court. A licensed insolvency practitioner has given

More information

Assets Anything that belongs to the debtor that may be used to pay his/her debts.

Assets Anything that belongs to the debtor that may be used to pay his/her debts. This is a brief explanation of some of the terms you may come across in debt and insolvency proceedings. Please note that this glossary is for general guidance only. Many of the terms have a specific technical

More information

The Creditors Guide to Insolvency. Kindly Provided by

The Creditors Guide to Insolvency. Kindly Provided by The Creditors Guide to Insolvency Kindly Provided by During the recent worldwide financial instability a number of our customers have found themselves to be a creditor of an insolvent entity, i.e. owed

More information

DRN. Guide to a Debt Relief Notice

DRN. Guide to a Debt Relief Notice nseirbhís Dócmhainneachta na héirea DRN Guide to a Debt Relief Notice n Insolvency Service of Ireland A Debt Relief Notice enables an eligible insolvent debtor with limited disposable income and assets

More information

Insolvency: a guide for directors When Where How - What

Insolvency: a guide for directors When Where How - What Insolvency: a guide for directors When Where How - What Contents 1. About this guide... 3 What is insolvency?... 3 What is The Insolvency Service?... 3 What is compulsory liquidation (winding up by the

More information

OPTIONS FOR COMPANIES IN FINANCIAL DIFFICULTY

OPTIONS FOR COMPANIES IN FINANCIAL DIFFICULTY OPTIONS FOR COMPANIES IN FINANCIAL DIFFICULTY WHY CHOOSE McDONALD VAGUE? VAGUE McDonald Vague is New Zealand s leading business recovery and insolvency firm, and has been in existence for over 20 years.

More information

GUIDE. Guide to Winding Up of Solvent and Insolvent Jersey Companies

GUIDE. Guide to Winding Up of Solvent and Insolvent Jersey Companies GUIDE Guide to Winding Up of Solvent and Insolvent Jersey Companies TABLE OF CONTENTS PREFACE...2 1. Summary Winding Up...3 2. Creditor s Winding Up...3 3. Bankruptcy...4 4. End of Period of Duration...5

More information

Top ten questions from creditors of troubled companies

Top ten questions from creditors of troubled companies Top ten questions from creditors of troubled companies A Guest Article by Julian Charles January 2010 What creditors want to know Below are the ten questions most frequently asked by creditors of companies

More information

Members Voluntary Liquidation. Appointment Package

Members Voluntary Liquidation. Appointment Package Members Voluntary Liquidation Appointment Package This package contains the necessary instructions and documentation to place a company into Members Voluntary Liquidation. Documents contained in package

More information

A Guide for Creditors

A Guide for Creditors A Guide for Creditors Contents 1. About this guide... 3 2. What is The Insolvency Service?... 3 3. What is insolvency?... 3 4. What are the insolvency procedures?... 4 5. Who deals with the insolvency

More information

Briefing Note: Enforcement of a Judgment

Briefing Note: Enforcement of a Judgment An Introduction to the Briefing Note Obtaining an award of damages and/or costs may only be the first step in getting what you are entitled to. Where the party ordered to pay damages and/or costs (the

More information

Terms and Conditions of Offer and Contract (Works & Services) Conditions of Offer

Terms and Conditions of Offer and Contract (Works & Services) Conditions of Offer Conditions of Offer A1 The offer documents comprise the offer form, letter of invitation to offer (if any), these Conditions of Offer and Conditions of Contract (Works & Services), the Working with Queensland

More information

How Business Owners Can Legally Protect Their Business and Personal Assets

How Business Owners Can Legally Protect Their Business and Personal Assets How Business Owners Can Legally Protect Their Business and Personal Assets By Dino Di Rosa, Di Rosa Lawyers P a g e 1 Introduction 1. For every business owner it is critical to look at ways they can protect

More information

COMMUNIQUE. NEW TAX LAWS Act Now! August 2012

COMMUNIQUE. NEW TAX LAWS Act Now! August 2012 COMMUNIQUE NEW TAX LAWS Act Now! August 2012 In recent weeks there have been changes to the Income Tax Assessment Act that may have a significant impact on you and your business entity. This Act is referred

More information

Guide to Solvent Company Liquidations. Your options explained: Corporate Simplification, Member s Voluntary Liquidation, Company Deregistration

Guide to Solvent Company Liquidations. Your options explained: Corporate Simplification, Member s Voluntary Liquidation, Company Deregistration Guide to Solvent Company Liquidations Your options explained: Corporate Simplification, Member s Voluntary Liquidation, Company Deregistration Corporate Simplification Review Simplifying your corporate

More information

Duty to prevent insolvent trading: Guide for directors

Duty to prevent insolvent trading: Guide for directors REGULATORY GUIDE 217 Duty to prevent insolvent trading: Guide for directors July 2010 About this guide This guide is for directors and their professional advisers. It may also be of interest to registered

More information

Sixth Statutory Managers Report

Sixth Statutory Managers Report Sixth Statutory Managers Report Aorangi Securities Limited 4 March 2011 Sixth Statutory Managers Report for Aorangi Securities Limited March 2011 2 Introduction History On 20 June 2010, Richard Grant Simpson

More information

NOTICE OF APPOINTMENT OF ADMINISTRATOR AND FIRST MEETING OF CREDITORS

NOTICE OF APPOINTMENT OF ADMINISTRATOR AND FIRST MEETING OF CREDITORS Contact: Samantha Morgan Email: smorgan@hlbinsol.com.au Phone: (08) 9215 7900 15 January 2016 NOTICE OF APPOINTMENT OF ADMINISTRATOR AND FIRST MEETING OF CREDITORS Dear Sir / Madam C.A.P. Steel Pty Ltd

More information

PIA. Guide to a Personal Insolvency Arrangement

PIA. Guide to a Personal Insolvency Arrangement nseirbhís Dócmhainneachta na héirea PIA Guide to a Personal Insolvency Arrangement n Insolvency Service of Ireland A Personal Insolvency Arrangement enables an eligible insolvent debtor to reach agreement

More information

STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS. Produced by the IVA FORUM

STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS. Produced by the IVA FORUM Protocol Annex 4 STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS Produced by the IVA FORUM Revised January 25 th 2008 TABLE OF CONTENTS FOR STANDARD CONDITIONS PART I: INTERPRETATION Page 1 Definitions

More information

DIFC Insolvency Regulations (IR)

DIFC Insolvency Regulations (IR) DIFC Insolvency Regulations (IR) 74085-00002 BK:9905372.1 1 1 October 2008 Contents The contents of this module are divided into the following Chapters, Sections and Annexes. 1. Introduction... 5 1.1 Application

More information

Application for Credit (Business Account)

Application for Credit (Business Account) Application for Credit (Business Account) APPLICANT INFORMATION Structure Public Company Proprietory Company Sole Proprietor Partnership Company Trading As Trustee for ACN / ABN Phone Fax Mobile Email

More information