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Definitions
/Definitions
TermDefinitionSee More
InsolvencyAn insolvent company is one that is unable to pay its debts when they fall due for payment. When a person is unable to pay their debts please consult AFSA for information about bankruptcy and personal insolvency agreements.AFSA
ASIC
Personal Insolvency & BankruptcyIf you yourself are unable to pay your PERSONAL bills please consult Australian Financial Security Association for information about bankruptcy and personal insolvency agreements.AFSA
Liquidator DutiesThe liquidator aims are:
- To collect, protect and realise the company’s assets
- To investigate and report to creditors about the company’s affairs, including any unfair preferences that may be recoverable, any uncommercial transactions that may be set aside, and any possible claims against the company’s officers
- To inquire into the failure of the company and possible offences by people involved with the company and report to ASIC
- To distribute the proceeds of realisation – after payment of the costs of the liquidation, and subject to the rights of any secured creditor – first to priority creditors, including employees, and then to unsecured creditors
ASIC
Administrator AppointedThe purpose of liquidation or administration of an insolvent company is to have an independent and suitably qualified person (the liquidator) take control of the company so that its affairs can be wound up in an orderly and fair way for the benefit of all creditors.ASIC
Voluntary Administration Voluntary administration is a process designed to resolve the company’s future direction quickly, hopefully without liquidation.

An independent qualified insolvency professional (the administrator) such as Bob Jacobs from Auxilium Partners (LINK) is appointed to control the company to work out a way to save either the company or the company’s business. Based on his/her examination of the company’s affairs, the administrator may be able to restructure the company utilizing a Deed of Company Arrangement (DOCA)LINK. If it isn’t possible to restructure the company or its business, the aim is to administer the affairs of the company in such a way that results in a better return to creditors than they would have received if the company had been placed straight into liquidation.

Putting a company into voluntary administration can be done by director/s calling a meeting of the board of the company, resolving that the company is insolvent, or likely to become insolvent, and resolving that a suitably qualified (should be a registered liquidator) voluntary administrator should be appointed.
ASIC
Deed Of Company Arrangement (DOCA)A deed of company arrangement or DOCA may be agreed to as a result of the company entering voluntary administration. The document aims to maximise the chances of the company, or as much as possible of the company’s business continuing, or to provide a better return for creditors than an immediate winding up of the company, or both.

A formal agreement is created between all participants in a company outlining the way to move forward and to share out a definite amount to creditors. A DOCA is designed to give the business time and a formal structure to continue to trade on in a profitable way.
ASIC
ASIC - RG 82
CreditorYou are a creditor of a company if the company owes you money. A creditor is owed money by a person or company (the debtor). Creditors are usually lenders, suppliers of goods, retail customers and sometimes employees
Secured CreditorA secured creditor has security for a loan. Security is an asset promised to guarantee the repayment of a debt. Security is intended to cover the debt amount if the debtor can’t pay it back. PPSR exists to protect creditors. EXAMPLE. Personal property is assets other than land and includes, cars, boats, business inventory, copyright, patents, bank accounts and debts If you have registered on PPSR you are a secured creditor. PPSR is the Australian online register that records information about security interests. PPSR is administered by the government PPSR
ASIC
Unsecured CreditorAn unsecured creditor does not have security for a loan. EXAMPLE

FAQ PPSR = Personal Property Securities Register or you can think of it this way:
If you are in business Personal Property = GOOD/ASSETS and Securities Register = DEBT
PPSR
Business Recources
ReceivershipA company most commonly “goes into receivership” when a receiver is appointed by a secured creditor who holds a security interest in some or all of the company’s assets. The receiver’s primary role is to collect and sell enough of the company’s collateral (property) to repay the debt owed to the secured creditor. The court may also appoint a receiver over a company’s assets.ASIC
AFSA (Australian Financial Security Authority)The place to look if you yourself are unable to pay your bills, please consult Australian Financial Security Association for information about bankruptcy and personal insolvency agreements AFSA
ARITA (Australian Restructuring Insolvency & Turnaround Association)VIEW MORE insolvency terms explainedARITA
ASIC (Australian Securities & Investment Commission) VIEW MORE insolvency terms explainedASIC
Business Restructuring & ReviewsAuxilium Partners provides business owners and investors/shareholders with expert advice to:
- Address liquidity crisis
- Improve working capital management and position the company for successful operational and financial restructure
- Stabilize operations
- Review/negotiate a restructuring/ turnaround package
- Act as an Independent Financial Advisor in respect of multi-creditor workouts
- Act as a Chief Restructuring Officer/Monitoring Agent to review and implement the turnaround/restructuring package
Operational Performance ImprovementAuxilium Partners provided expert review of operational efficiency and productivity with the view to improving operating margin and cash flows through analysis of:
- Core and support process improvements
- Supply chain (distribution and logistics) and procurement optimisation
- Evaluation and improvement in outsourcing strategies
- Optimisation of overheads and reduction in indirect procurement costs
- Optimisation of working capital – cash, receivables and inventory
- Improvement in productivity of fixed assets
Business Rescue The three most common corporate insolvency solutions are: voluntary administration, liquidation and receivership.ASIC Insolvency
List of Registered Liquidators ASIC
List of Insolvent Businesses ASIC

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