The Dark Side of Voluntary Administration in Australia
The purpose of voluntary administration in Australia is to rescue a struggling business and, where this is not possible, to get a better return for creditors than a straight winding up.
Regular cash flow projections and comparison to actuals
Cashflow refers to the movement of money into and out of business, and it is one of the essential financial indicators for the business. This is why a proper financial record keeping is so important.
What is the role of ASIC in regulating liquidators?
In Australia, the Australian Securities & Investments Commission (ASIC) is the government body in charge of regulating liquidators and other aspects of the insolvency process. Here we examine ASIC’s role in detail and compare it with the approach taken across the Tasman.
What are the good parts of the Australian voluntary administration process?
It is fair to say that, generally speaking, voluntary administration is not a successful mechanism for restructuring insolvent companies in Australia. Less than one percent end up in a successful compromise with creditors, a Deed of Company Arrangement (‘DOCA’), and continue trading.
Restructuring service businesses in Australia is all about intangibles
Debt and asset restructuring for financially distressed companies has taken on a new significance in Australia with the introduction of a new process last year — small business debt restructuring.
What business assets are lost in an insolvent liquidation?
The winding up or liquidation of a company means realising the assets of the business and distributing the proceeds to unsecured creditors. The problem: some portion of the business’ total value is always lost in an insolvent liquidation.
If Economic Distress, Liquidate. If Financial Distress, Save through Restructure.
Businesses can struggle or fail in different ways. Consider an unprofitable transport business that hasn’t been able to put up rates in 20 years due to stiff competition. Or, consider the same type of business, where its unprofitability is caused by the inability to pay debts entered into by prior directors.
Why an external administration in Australia can turn into a Seinfeld episode
Seinfeld is famously referred to as a sitcom about ‘nothing’. Sometimes liquidations and voluntary administrations in Australia lose the plot and directors would be well served to conduct thorough due diligence before appointment and understand the dynamics at play.
The Australian entrepreneur’s guide to starting a crypto or fintech business in the Cayman Islands
If you serve an international customer market, the question naturally arises; where is the best place to base your crypto or fintech business? Our focus here is on exploring offshore solutions for Australian fintech and crypto startups — looking specifically at the possibility of setting up in the Cayman Islands (Cayman) as a jurisdiction of incorporation.
The Complete Guide to working out whether your troubled business should go into Voluntary Administration, Small Business Restructuring or just be liquidated?
When a business is in serious financial trouble, what is the best path ahead? This is, of course, a question for the directors of struggling businesses themselves, but it’s also a question for their lawyers, accountants and creditors.
How are pre-insolvency advisers regulated in Australia?
Pre-insolvency advice is an area that is relatively under-regulated in Australia. While there is a range of Codes of Ethics and professional standards that may apply, they will only apply where an individual is a member of that specific profession or association (e.g. ARITA, CPA Australia or ABRTC).
What bodies oversee company liquidators in Australia?
As with any profession, it is crucial that there is some level of oversight of the actions of insolvency practitioners. This is the only way to ensure that they are living up to their professional and legal standards.