We provide high calibre Legal representation for dispute mitigation related to insolvent trading, liquidation, receivership, and schemes of arrangement. DOC Lawyers have played crucial roles in helping  Directors in navigating complex and often high-stakes situations involving financially distressed companies in Australia. 

Legal Representation:

• This refers to the engagement of qualified lawyers and legal firms to act on behalf of individuals or entities involved in disputes related to the listed corporate insolvency procedures.
• Legal representation provides expertise in understanding the relevant legislation (primarily the Corporations Act 2001 (Cth)), case law, and procedural requirements.
• Lawyers can offer a range of services, including:
  • Providing legal advice and strategic guidance.
  • Drafting and reviewing legal documents (e.g., court applications, affidavits, agreements).
  • Negotiating with other parties.
  • Representing clients in court proceedings or other dispute resolution forums.
  • Conducting investigations and gathering evidence.

Disputes Related To:

• This emphasizes that legal representation is often required when disagreements or conflicts arise in the context of these insolvency procedures. These disputes can involve various parties, including:
  • Company directors
  • Liquidators or administrators
  • Receivers
  • Creditors (secured and unsecured)
  • Shareholders
  • Employees
  • Regulatory bodies (e.g., ASIC)

Insolvent Trading:

• Definition: Insolvent trading occurs when a company incurs new debts at a time when it is insolvent (unable to pay its debts as and when they become due and payable) or becomes insolvent by incurring that debt, and a director allows this to happen.
• Potential Disputes:
  • Director liability: Liquidators often pursue directors personally for losses incurred by the company while trading insolvent. Directors may dispute allegations of insolvency or argue they had reasonable grounds to expect solvency.
  • Creditor claims: Creditors may dispute the liquidator's assessment of the timing of insolvency and argue that debts were incurred while the company was already insolvent.
  • Voidable transactions: Liquidators may seek to claw back payments or transfers made by the company while insolvent, potentially leading to disputes with recipients of those transactions.

Liquidation:

• Definition: Liquidation is a formal process where a company's assets are realized, its debts are paid (as far as possible), and the remaining funds are distributed to shareholders before the company is deregistered.
• Potential Disputes:
  • Appointment of liquidator: Disputes can arise regarding the appointment or removal of a liquidator.
  • Asset realization: Disagreements may occur over the valuation or sale of company assets.
  • Proof of debt: Creditors may dispute the liquidator's acceptance or rejection of their claims.
  • Priorities of creditors: Secured and unsecured creditors may have conflicting views on the order in which debts should be paid.
  • Liquidator conduct: Stakeholders may challenge the liquidator's actions or decisions.

Receivership:

• Definition: Receivership involves the appointment of a receiver (often by a secured creditor) to take control of specific assets of a company to realize those assets and repay the debt owed to the appointing creditor.
• Potential Disputes:
  • Appointment of receiver: The validity or scope of the receiver's appointment can be challenged.
  • Receiver's powers and conduct: Disputes may arise regarding the receiver's actions in managing and selling the assets.
  • Interaction with liquidator: If a company enters liquidation while in receivership, conflicts can occur between the receiver and the liquidator regarding control of assets.
  • Claims by other creditors: Unsecured creditors may dispute the priority of the secured creditor's claim.

Schemes of Arrangement:

• Definition: A scheme of arrangement is a court-approved agreement between a company and its creditors or members (or a class of them) to restructure its debts or capital. It's a less drastic alternative to liquidation.
• Potential Disputes:
  • Fairness and reasonableness of the scheme: Creditors or members may argue that the proposed scheme is unfair or not in their best interests.
  • Classification of creditors/members: Disputes can arise over the appropriate grouping of creditors or members for voting purposes.
  • Disclosure of information: Concerns may be raised about the adequacy of information provided to creditors or members before they vote on the scheme.
  • Court approval: Objections can be raised during the court approval process.

When companies face financial distress and enter formal insolvency procedures like insolvent trading investigations, liquidation, receivership, or attempt to restructure through schemes of arrangement, disputes are quite common.

Our Legal representation is essential for individuals and entities involved in these situations to:

• Understand their rights and obligations.
• Navigate the complex legal framework.
• Protect their interests.
• Effectively resolve disagreements through negotiation, mediation, or litigation.

Engaging our experienced legal counsel early in these processes can significantly impact the outcome of any potential disputes and help stakeholders navigate these challenging situations effectively.