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FAQ
/FAQ

Below is a list of frequently used terminology.

+ - ASIC LIST of insolvent businesses
+ - ARITA (Australian Restructuring Insolvency and Turnaround Association)
+ - AFSA (Australian Financial Security Authority)

The place to look if you yourself are unable to pay your bills,  please consult AFSA for information about bankruptcy and personal insolvency agreements LINK https://www.afsa.gov.au/

+ - ADMINISTRATOR APPOINTED

The 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.

 

How does external administration affect shareholders and creditors? LINK  https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-shareholders/

+ - ASIC (Australian Securities and Investment Commission)
+ - business rescue options

The three most common corporate insolvency solutions are: voluntary administration, liquidation and receivership.  LINK  https://asic.gov.au/insolvency

+ - Business Restructuring and Reviews

Auxilium 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

+ - CREDITOR

You 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

+ - 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. LINK https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-employees/employees-deed-of-company-arrangement/

FAQ Creditors’ Trust
LINK RG 82  https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-82-external-administration-deeds-of-company-arrangement-involving-a-creditors-trust/

+ - INSOLVENT

How to know if company or business is insolvent?

An insolvent company is one that is unable to pay its debts when they fall due for payment.

+ - INSOLVENCY

An 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
LINK https://www.afsa.gov.au/

ASIC maintains records of insolvent companies.
LINK https://asic.gov.au/regulatory-resources/insolvency/insolvency-notices/

+ - LIQUIDATOR DUTIES

The limitations and obligations of liquidators are described by Australian law:
LINK https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors/#who

The 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
+ - Operational Performance Improvement

Auxilium 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
+ - RECEIVERSHIP

A 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.

LINK https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/insolvency-a-guide-for-directors/

+ - PERSONAL INSOLVENCY + BANKRUPTCY

If you yourself are unable to pay your PERSONAL bills please consult AFSA for information about bankruptcy and personal insolvency agreements

LINK https://www.afsa.gov.au/

+ - SECURED CREDITOR

A 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. LINK https://www.ppsr.gov.au/

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  LINK https://www.ppsr.gov.au/

Bob Jacobs from Auxilium Partners can be appointed as receiver by secured creditors seeking to recover their debt because he is a registered insolvency professional.   LINK  https://asic.gov.au/online-services/search-asics-registers/professional-registers/

+ - UNSECURED CREDITOR

An 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
LINK https://www.ppsr.gov.au/
DOWNLOAD the pdf
LINK  https://www.ppsr.gov.au/sites/default/files/PPSR-business-guide.pdf
CASE STUDIES about PPSR  LINK https://www.ppsr.gov.au/business-resources

+ - VOLUNTARY ADMINISTRATION (VA) – CREDITORS VA or MEMBERS VA

LINK https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/insolvency-a-guide-for-directors/

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. The directors need to obtain the written consent of a registered liquidator such as Bob Jacobs to act as voluntary administrator LINK to Contact

+ - Who Gets Paid First When A Company Is In Liquidation?

Get in touch today for a free consultation