action by hot copper shareholders, page-12

Presuming that some of you are already aware of this, but the general process where companies are put into administration:

- the administrators MUST be independant and their decisions cannot be influenced by the directors
- if the creditors vote to liquidate the assets of the company then the liquidators (most often the original administrators are appointed as the liquidators) legally have to do a submission to ASIC on the corporate governance and behaviour of the directors and whether ASIC should pursue possible punitive action. This includes things like insolvent trading, negligence etc. They also have to report whether as part of their audit of accounts during the administration and liquidation they uncovered any misnomers.
- If the creditors agree to a deed of company arrangement ( whereby the company would continue to operate if they thought this was a better prospect for recovering their money) or if the operation of the company is sold en masse (ie a takeover) then the liquidators do not submit a report to ASIC.

So those seeking action from ASIC - if the company is liquidated then this happens by default.

If there is a deed of company arrangement or a takeover that would then be when you would either make submissions to ASIC or take civil action against the directors. I would suggest ASIC would be loathe to instigate anything while the administration process is going on.

It's not a fun process - I've been through it a while back as an employee (found out my corporate card had been cancelled and I had been retrenched while I was working interstate - possibly the biggest "Oh Sh**" moment of my life). All I can say is that thank god for the GEERS process which means employee money (apart from unpaid super) is guaranteed by the government if the company gets liquidated. I know it is cold comfort to those who are losing their jobs though.