Advice to Directors
When a company becomes insolvent
and cannot pay its debts as and when they fall due, a director of a company in Australia has substantial obligations pursuant to the Corporations Act. In the event that the director does not act in accordance with their duties and obligations pursuant to the Corporations Act the director may be found to have breached his or her duties and that may be an offence depending on the nature of the alleged breach. The director can also become personally liable for some debts. Our firm can advise directors in respect of the options that are available to the directors having regard to the circumstances of each case. There are generally a range of options available to directors, but the options of directors dealing with insolvency issues can diminish as time goes by. Accordingly, if a director experiences any insolvency issues regarding a company or is concerned about the company potentially becoming insolvent, they should seek advice at the earliest possible opportunity.
When a company is, or is likely to become insolvent, there are options for a potential restructure of the business. It is important; however, to obtain the right legal advice to ensure that a director is acting in accordance with his or her director’s duties and a proposed restructure is lawful.
Our firm can assist in the restructuring of a business, and we have acted in complex restructures involving several entities within a particular group. It is often the case that there are various competing interests of all relevant stakeholders, creditors, debtors and a group as a whole which must be managed appropriately. Accordingly, it is imperative to obtain the right advice prior to embarking on a proposed restructure of a business. In the event that the right advice is not obtained from the outset, then this can be catastrophic for the directors of a company. There are obligations of directors at law that must be considered in any proposed restructure. Contact our offices on the Gold Coast and in Brisbane for help.
Asset protection is an integral part of any business venture. A structure that is effective from an asset protection point of view should be considered at the outset and before any business is conducted. Unfortunately, most only decide to take steps to protect their assets when the business is at risk of insolvency, or there is a threat from creditors. It is essential that parties take proactive steps in respect of asset protection given the risks of being involved in business.
The firm regularly advises directors in relation to:
- Voluntary administrations;
- Liquidations; and
Any form of insolvency administration is a very stressful time for the director(s) of the company. Our firm has a vast amount of experience in advising directors in relation to insolvency administration for large corporate groups of entities and for small business. We have the expertise to advise a director to ensure that he or she is compliant with all relevant laws and is acting in accordance with their duties as a director. It is essential that directors get the right advice early on so that they are acting in the interests of the company and the company’s creditors. Contact our offices on the Gold Coast and in Brisbane for help.
Advice and Actions on behalf of Liquidators
Our firm regularly acts on behalf of insolvency practitioners in respect of the following:
- Preferential payment claims;
- Voidable transactions;
- PPSA disputes;
- Insolvent trading claims;
- Deeds of Company Arrangement;
- Advice to liquidators on matters that arise;
- Lodging of caveats and debt recovery; and
- Any other advice that liquidators may need in respect of the administration of a corporate insolvency.
Advice to Creditors
The insolvency of a company can be complex and difficult for a creditor to understand. It is important that the creditor obtain advice in respect of their position, and if necessary obtain advice in respect of lodging a formal proof of debt for issues concerning the insolvency administrations. In the event that you require advice in respect of a creditor of a company that has gone into a form of insolvency administration, then we invite you to contact our office promptly so that we may take steps to protect your interests. Contact our offices on the Gold Coast and in Brisbane for help.