Voluntary Administration recipes
Insolvent Trading – another ASIC court action
I know from the many calls we take at Dissolve that most directors are aware of, and worried about, insolvent trading laws. There was an interesting case I blogged about last year here and another much bigger case has been commenced by ASIC this month. Click Here To Read More
Insolvent Trading Laws – broken, yes, but changes shelved
In 2010, it was announced that the Government would review Australia’s insolvent trading laws, which are amongst the toughest in the world. In brief, the law currently says that if a company is insolvent and the directors allow the company to incur new debts, then the directors can be personally liable for those new debts. It was recently announced that the proposed changes, which would have put Australia on a similar footing to other countries, have been shelved.
Let me make my view clear – Australia’s insolvent trading laws are completely flawed. Let me explain. Click Here To Read More
When to use a Voluntary Administration
I explained here in a recent blog that the alternative to placing a company into Liquidation was to use a Voluntary Administration, however, the statistics have shown that “VA’s” have been quite spectacularly unsuccessful in achieving their stated aim of saving a company. It’s not often, but there are particular situations, when I do recommend a VA as a better alternative than a liquidation or some other restructuring technique. I’ve detailed below the ideal situation for a Voluntary Administration.
How successful are Voluntary Administrations at saving a company?…..not very!
Voluntary Administrations, or “VAs”, were introduced in the early 1990s as a new insolvency law designed to save a company. How successful have VAs been?…..Not at all!!! So let’s have a look at how often a VA saves a company and then examine why they have been so spectacularly unsuccessful in achieving the stated aim.
