Our Services - Corporate Insolvency Management / Recovery

Receiverships

SimsPartners has extensive national and international experience acting as receivers for secured creditors, including all of the major national banks and financiers operating in Australia..

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View a list of assets and business’ currently for sale.

Voluntary Administrations (VAs)

The VA process provides for a company’s business to be administered in a way that;

maximizes the chances of the company, or so much as possible of its business, continuing in existence, or

if it is not possible for the company or its business to continue in existence, results in a better return for the company’s creditors and members than would result from an immediate winding up of the company.

The VA process provides directors with a formal and yet flexible avenue of resurrecting financially stressed companies.

Directors of companies that are insolvent or is likely to become insolvent should seek immediate professional advice, which may include the appointment of a Voluntary Administrator. Failure to do so may result in breaches of the Corporations Act, including liability for insolvent trading.

We work with directors and creditors to achieve the optimal commercial outcome. DOCAs require approval of creditors before they maybe executed and have the force of law.

At SimsPartners, we have worked as Administrators in most industries.

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What you can expect

During the VA process, the Voluntary Administrator assumes the power to deal with the assets and affairs of the company. Depending on the commercial viability, we may choose to continue running the company until the final outcome becomes clearer. Otherwise, we may close the business down and in some cases, immediately start selling its assets. Whichever is the more beneficial to creditors.

Deed of Company Arrangement

A Deed of Company Arrangement (DOCA) is an agreement between the company and its creditors. A DOCA typically provides for creditors to receive a dividend of x cents in the dollar and stipulates from where the funds will be obtained and in order in which they will be paid to creditors. (for example, funds may be obtained from the sale of assets, future profits, third party contributions etc:

If a DOCA is agreed to and executed, the VA comes to an end, the Voluntary Administrator usually becomes the Deed Administrator and the company continues in existence, subject to the terms and conditions of the DOCA.

If a DOCA is not proposed, or, one is proposed however rejected by creditors, then the company is wound up and Voluntary Administrator becomes Liquidators of the Company.

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Liquidations

Many of our partners are official liquidators with significant experience in managing the winding up process. We have achieved great success in realising the assets of companies for the benefits of all creditors and operate one of the largest court liquidation practices in Australia

During a Liquidation, as with Administrations, we may continue to keep the company running for a time in order to sell the assets as a going concern. In other cases, we close the business and sell the assets either by auction, tender, private treaty or a combination of the various methods available. Once the assets have been realised, the funds are distributed to the creditors according to their ranking as determined by the law.

A simplified ranking of creditors is:

First Priority Creditors (employee entitlements & superannuation)
Second Secured Creditors (banks, leasing companies)
Third Unsecured Creditors
Fourth Shareholders return of capital invested

As Liquidators, SimsPartners also has a duty to investigate the affairs of a company and in some cases, commence legal action against directors or other parties in an effort to recover moneys for the benefit of creditors.

When all assets have been sold, legal proceedings concluded and all funds distributed to creditors, the liquidation is at an end and the company is deregistered from the ASIC registry and ceases to exist.

Click here to view Tony Sims' article on liquidating Enron Australia:

Enron: a house of cards built over a pool of gasoline.

Members Voluntary Liquidation

A member's voluntary liquidation can only occur where the company is solvent. As a consequence creditors are not directly involved in the winding up as their debts will be fully satisfied during this procedure. The directors must be able to declare that the company will be able to pay all debts within 12 months from the commencement of winding up. The surplus funds available after the discharge of all the company's debts are distributed to members either in specie or cash under this form of liquidation.

These types of administrations are common, as part of the reconstruction of a group of companies, or when members feel that the company need no longer exist and it is preferable to wind it up rather than sell the corporate shell or deregistration of the company.

Solvent Companies that are wound up are subject to different principles and procedures than companies wound up due to their insolvency.

Creditors Voluntary Liquidation

Members voluntary liquidation, members of the company must first pass a special resolution to wind up the company, usually because the company is insolvent.

Creditors play a more active role in this liquidation process including ratifying the liquidators' appointment, requesting creditors meetings to be convened, acting on committee of inspection and approval of liquidators fees. Members and directors are essentially excluded from involvement in the supervision of the winding up.

The directors and shareholders must consider it desirable that the company is wound up, otherwise this mode of liquidation cannot occur. Circumstances where this may be desirable include when the company has ceased to trade, where the company wishes to cease to trade for the interest of the public, or so that its officers do not incur penalties for breaches of the Corporations Law, such as trading whilst insolvent.

Provisional Liquidation

An Official Liquidator may be appointed as provisional liquidator quickly and conveniently. Such an appointment gives interim control of the company to a provisional liquidator until final determination of the winding-up application. The appointee is generally empowered only to take possession of company assets and preserve them until the hearing of the application to wind-up. This frequently entails carrying on the company's business.

The appointment of a provisional liquidator does not mark the commencement of winding up, however it does place a freeze on any creditor proceedings. Application to appoint a provisional liquidator is generally made by a creditor, member or ASIC in order to quickly stabilise an insolvent entity and prevent the dissipation of assets prior to the Winding Up order being granted. It is normally implemented in hostile environments or where internal disputes exists.

A Court may determine that a provisional liquidator should be appointed where it considers that a company may dissipate its assets prior to the hearing of the application to wind-up the company. The Court may also appoint a provisional liquidator where an investigation into the company's affairs is desirable, to determine whether liquidation can be avoided.

Superannuation

SimsPartners have leading experience in the conduct of Acting Trusteeships of impaired superannuation funds. Our appointments are facilitated by the Australian Regulation & Prudential Authority (APRA) under Section 133 of the Superannuation Industry (Supervision) Act 1993 (“SIS”).

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SimsPartners Trustee Services Pty Limited A.C.N. 081 624 320 have recently been granted a Registrable Superannuation Entity License (RSE License No. L0003179) by APRA. The obtaining of this license is fundamental to our ability to act as Acting Trustees of superannuation funds which are subject to APRA’s regulatory supervision.

Our appointment as Acting Trustee will normally be brought about in the following circumstances:

A fund is operated by a Trustee without an RSE License or in breach of the conditions of the License;
Members funds may be at risk as a result of the Trustee’s conduct
The trustee is a disqualified person

Once appointed as Acting Trustee, we are required to secure the fund assets, oversee the continuing operations of the fund, verify the accuracy of the amounts due to fund members and facilitate the transfer of the assets to a complying Fund. This process can take between 3 to 12 months depending upon the complexity of the issues involved.

Separately, we may be appointed as an Inspector of a superannuation Fund by APRA under the provisions of SIS. This appointment will normally be for the purpose of establishing that the trustee is conducting the fund in the interest of its members.