Voluntary administrations provide for the administration of the business, property, and affairs of an insolvent or near-insolvent company.
Such companies are to be administered in a way that:
Maximises the chances of the company, or as much as possible of its business, continuing in existence; or
If it is not possible for the company or its business to continue in existence, results in a better return for the company’s creditors and shareholders than would result from an immediate liquidation of the company.
At Norling Law we have expert administration lawyers who offer a FREE 30-minute Legal Consultation where we can discuss the issues and we can add some strategic value. After the discussion, we can decide whether we can help you and at what cost.
Appointment of an Administrator
An administrator may be appointed to a company by:
The company; or
If the company is in liquidation, the liquidator; or
If an interim liquidator has been appointed, the interim liquidator; or
A secured creditor holding a charge over the whole, or substantially the whole, of the company’s property; or
Most commonly, the appointment is by the board. The ability for the board to appoint administrators is an important step to deal with an insolvent or near-insolvent company. Doing so may allow the board to avoid personal liability for reckless trading.
To appoint an administrator, the board must resolve that:
In the opinion of the directors voting for the resolution, the company is insolvent or may become insolvent; and
An administrator of the company should be appointed.
In the event that an application for appointment of a liquidator has been filed at the High Court, the board may only appoint an administrator within 10 working days after service of that application.
First Creditors Meeting
The administrator must call a first creditors’ meeting to
Decide whether to appoint a creditors’ committee and, if so, to appoint its members; and
Decide whether to replace the administrator.
The meeting must be held within 8 working days after the date on which the administration began.
The administrator must call a watershed meeting.
The watershed meeting is the meeting of creditors called by the administrator to decide the future of the company and, in particular, whether the company and the deed administrator should execute a deed of company arrangement.
The administrator must convene the watershed meeting within 20 working days after the appointment of an administrator.
We assist clients to navigate this process correctly. There are many pitfalls if implemented incorrectly.
Please refer to our People for more information on who we are, our experience and how we can help you.
We have offices on the North Shore in Auckland, New Zealand or can have the consultation by phone.