Introduction to Corporate Finance

ONLINE CHAPTER

FIGURE 22.1 THE VOLUNTARY ADMINISTRATION PROCESS

Directors Secured creditor Liquidator

By resolution of

the Board and

in writing

Charge over all or

substantially all of the

company’s property

Or provisional liquidator Decision to appoint

administrator

Appointment of

voluntary

administrator

Voluntary

administration

begins

Creditors can vote to:

▪ replace the

administrator

▪ create a committee of

creditors.

First meeting of

creditors

Within 8 business

days of appointment

of voluntary

administrator*

(at least 5 business days

notice is required)

Administrator must

investigate company’s

affairs and report to

creditors on

alternatives

Meeting to decide

company’s future

Within 25 or 30

business days

of appointment of

voluntary

administrator*

(at least 5 business days

notice is required)

Creditors decide to

return company to

the control of the

directors

OR

Creditors decide to

accept a deed of

company

arrangement

OR

Creditors decide to

put the company

into liquidation

Outcome of meeting

Within 15 business days*Immediately

Company signs a

deed and deed

administration

begins

Administrator

becomes liquidator

* Unless the court allows an extension of time.

Source: ‘Voluntary Administration: A Guide for Creditors.’ Information Sheet 74, © Australian Securities & Investments Commission.

Reproduced with permission, http://download.asic.gov.au/media/1348514/Voluntary_administration_guide_for_creditors.pdf