Ending a means to an end: transition from the voluntary administration process to a deed of company arrangement or liquidation

Article


Anderson, Colin. 2004. "Ending a means to an end: transition from the voluntary administration process to a deed of company arrangement or liquidation." University of Tasmania Law Review. 23 (1), pp. 15-44.
Article Title

Ending a means to an end: transition from the voluntary administration process to a deed of company arrangement or liquidation

ERA Journal ID34056
Article CategoryArticle
Authors
AuthorAnderson, Colin
Journal TitleUniversity of Tasmania Law Review
Journal Citation23 (1), pp. 15-44
Year2004
Place of PublicationHobart, Australia
ISSN0082-2108
Web Address (URL)http://www.lawreview.law.utas.edu.au/
Abstract

[Introduction]: The voluntary administration procedure is a temporary one in the life of a company. It is a means to an end. That end is represented in the outcomes of the process. Part 5.3A provides that there will be three possible outcomes from the administration. They are liquidation, the entering into a deed of company arrangement or a return of the company to its pre-administration situation . Voluntary administration is ultimately a means by which the insolvent corporate entity may get to a position where a plan of reconstruction or reorganization will be put in place or the company will enter liquidation. In addition the court may terminate the administration in certain circumstances . These outcomes are worthy of a study in themselves but it is beyond the scope of this article to deal with these other forms of administration in detail. The focus of this article is the transition to these other stages in the life of the insolvent company. It is argued that this transition is a strength of the overall Part 5.3A process but that there are some gaps in the legislation that require consideration in the evaluation of Part 5.3A.
In one sense the outcomes of the voluntary administration might be seen in the objectives for the Part 5.3A . These make it clear that the objects are to save as much of the business as possible and if that is not possible to gain a better return to creditors than would have been available in an immediate winding up. It is however the specific results that are measured against these criteria rather than the voluntary administration itself. Too much emphasis on the procedure leading to the outcomes may detract from an examination of the outcomes themselves. Accordingly it is necessary to examine the transition to determine how well the process of voluntary administration facilitates the achievement of the objectives. This article will cover issues that relate to the transition to the deed of company arrangement and the winding up of the company following voluntary administration. In so doing it is demonstrated that the transition to these other insolvency regimes is less regulated and less clear than the relatively methodical legislative regime for the administration itself. It is shown that the lack of legislative direction has resulted in the courts attempting to fill in the gaps. It is suggested that this does not always result in the best solution. It goes on to relate these matters to theory about the voluntary administration process based on the economics and law paradigm . The article makes several suggestions for law reform in these areas.

Keywordsvoluntary administration procedure, voluntary administration process, deed of company arrangement, liquidation
ANZSRC Field of Research 2020480103. Corporations and associations law
Public Notes

File reproduced in accordance with the copyright policy of the publisher/author.

Byline AffiliationsDepartment of Law
Permalink -

https://research.usq.edu.au/item/9x895/ending-a-means-to-an-end-transition-from-the-voluntary-administration-process-to-a-deed-of-company-arrangement-or-liquidation

Download files


Published Version
Anderson_UTLR_2004_PV.pdf
File access level: Anyone

  • 2380
    total views
  • 572
    total downloads
  • 1
    views this month
  • 0
    downloads this month

Export as

Related outputs

Miracle workers or ambulance chasers? The role of administrators in the Part 5.3A process
Anderson, Colin. 2004. "Miracle workers or ambulance chasers? The role of administrators in the Part 5.3A process." Insolvency Law Journal. 12 (4), pp. 238-255.
GST and insolvency practitioner liability: who are you?
Anderson, Colin and Morrison, David. 2001. "GST and insolvency practitioner liability: who are you? " Revenue Law Journal. 11 (1), pp. 23-45.
Decision-making in a voluntary administration
Anderson, Colin. 2004. "Decision-making in a voluntary administration ." Company and Securities Law Journal. 22 (3), pp. 163-180.
Should directors be pursued for insolvent trading where a company has entered into a deed of company arrangement?
Anderson, Colin and Morrison, David. 2005. "Should directors be pursued for insolvent trading where a company has entered into a deed of company arrangement?" Insolvency Law Journal. 13 (3), pp. 163-172.