Thanks guys and still trying to get my head around this and have uncovered the following:
With a voluntary administration the administrator may allow the business to continue trading in order to achieve a better outcome for creditors. The administrator may trade the business for several reasons, but the most common reasons are: • To arrange an orderly sale of the business • To assess and preserve the value of the business
The role of the administrator is to advise creditors as to how the best return can be achieved. This may be achieved by selling the business as a going concern or by recommending to creditors that they allow the business to continue trading and accept a series of payments from the profits from ongoing trading.
If creditors are prepared to accept a series of payments from ongoing trading, it will be necessary for a Deed of Company Arrangement to be proposed. The creditors must accept the proposal of the directors for the company to then enter a Deed of Company Arrangement.
Should liquidation be recommended:
In order for a Liquidator to be appointed, a meeting of Directors must be held at which time a Summary of Affairs must be made out in the prescribed form. As the resolution for winding up is a special resolution, at least 21 days notice of the meeting is required to be given.
However, this period can be shortened if 95% of the shareholders consent to short notice.
CMR Price at posting:
15.0¢ Sentiment: None Disclosure: Held
