Debt Recovery, Insolvency and Bankruptcy

Commercial Debt Recovery

Elite Legal has substantial and material experience commercial debt recovery experience.  Elite Legal provides pragmatic commercial solutions to companies on the collection of commercial debt.

Elite Legal can advise on the suitability of Letters of Demand, Statutory Demands and recent changes to the Corporations Act substantially reducing their effectiveness of Statutory Demands in the COVID-19 environment.

Whilst the Courts in Australia have been impacted by COVID-19, if appropriate and possible Elite Legal can commence proceedings promptly in any of the following courts:

  1. Local Court
  2. District Court
  3. Supreme Court

Elite Legal has commenced more that $350M in commercial debt collection proceedings across numerous Supreme Courts throughout Australia in recent years.  You can leverage this experience by using Elite Legal.

Insolvency

An insolvent company is one that is unable to pay its debts when they fall due for payment.

The three most common corporate insolvency procedures are voluntary administration, liquidation and receivership.

The personal insolvency procedures that apply to a person, not a company, are bankruptcy and personal insolvency agreements.

What is a voluntary administration?

Voluntary administration is where the directors of a financially troubled company or a secured creditor with a charge over most of the company’s assets appoint an external administrator called a ‘voluntary administrator’.

The role of the voluntary administrator is to investigate the company’s affairs, to report to creditors and to recommend to creditors whether the company should enter into a deed of company arrangement, go into liquidation or be returned to the directors.

A voluntary administrator is usually appointed by a company’s directors, after they decide that the company is insolvent or likely to become insolvent.

What is a liquidation or a winding up?

Liquidation is the orderly winding up of a company’s affairs. It involves selling the company’s assets and distributing the proceeds among creditors and distributing any surplus to shareholders. The three types of liquidation are:

  • court
  • creditors’ voluntary, and
  • members’ voluntary.

A creditors’ voluntary liquidation is a liquidation initiated by the company. A court liquidation starts as a result of a court order, made after an application to the court, usually by a creditor of the company.

What is a receivership?

A company most commonly goes into receivership when a receiver is appointed by a secured creditor who holds security or a charge over some or all of the company’s assets. The receiver’s primary role is to collect and sell enough of the company’s charged assets to repay the debt owed to the secured creditor.

What is a deed of company arrangement (DOCA)?

A DOCA is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with, which may be agreed to as a result of the company entering voluntary administration. It aims to maximise the chances of the company continuing, or to provide a better return for creditors than an immediate winding up of the company.

How can we help you with Insolvency?

Elite Legal has experience in and can assist client’s with the following:

  • Creditor’s Statutory Demands (including applications to set aside Creditor’s Statutory Demands) and winding up proceedings
  • Bankruptcy Notices (including applications to set aside Bankruptcy Notices) and bankruptcy proceedings
  • Deeds of company arrangement
  • Setting aside voidable transactions in both corporate insolvency and bankruptcy, including unfair preferences, uncommercial transactions, undervalue transactions and transfers to defeat creditors
  • Recovery actions on behalf of liquidators and trustees
  • Insolvent trading claims against directors
  • Agreements for the sale of an insolvent entities assets and property
  • Acting in the sale of a bankrupt’s land
  • Examinations of directors and bankrupts
  • Personal Properties Securities Act 2009 and retention of title disputes

Bankruptcy

A person is a ‘bankrupt’ if they have been declared bankrupt under the provisions of the Bankruptcy Act and have not been discharged from the bankruptcy. The bankruptcy is registered with Australian Financial Security Authority (AFSA).

What is a personal insolvency agreement under Part X?

A personal insolvency agreement’ (formerly known as a ‘Part X arrangement’) is an alternative to bankruptcy and for the purposes of the Corporations Act, is where a person enters into an agreement with their creditors without being made bankrupt. The person entering into the agreement must sign a deed.