Company Insolvency Lawyers in Sydney

Our insolvency lawyers in Sydney routinely provide advice to parties either who are experiencing financial challenges or as shareholders or creditors seeking debts to be repaid.

Our services for creditors and debtors include:

• Advising on directors’ duties & safe harbour provisions
• Advising investors, creditors and shareholders
• Drafting & Negotiating Deeds of Company arrangement
• Providing advice on disputes with liquidators or administrators
• Guidance through company liquidation processes
• Assisting with company administration matters
• Offering restructuring advice
• Advice regarding statutory demands & winding-up proceedings
• Preference claims issues
• Unreasonable director related claims issues
• Uncommercial transaction claims issues
• Public examination issues and legal representation
• Statutory Demands
• Disputes or Removal of a liquidator or administrator

Directors should be aware that if they seek advice early there may be more options available to them. Waiting until a creditor initiates action it adds time pressure and reduces the negotiation power you may have. Advice on payment plans and restructuring advice may help you to continue trading if sought early enough.

There are numerous avenues for restructure a struggling business, and with the right guidance and a well-crafted strategy, a business can be adequately turned around and begin trading with a clean slate and most importantly give you peace of mind.

While it can be daunting, insolvency does not need to signify the end of a business. Rather, it presents an opportunity for restructuring, reinvention or exploring of alternative debt repayment methods. Quality legal advice can give you the right options that can result in effective solutions to revive and streamline a company’s operations.

Directors have numerous obligations that if breached have significant consequences under the Corporations Act 2001. If your company faces financial challenges, you should act promptly to take advantage of Safe Harbour and Small Business Restructuring (SBR) Provisions.

Seeking restructuring advice can trigger the safe harbour provisions and afford you protection from the directors being personally liable for debts during a turnaround period. SBR also offers company directors a low-cost restructuring alternative to Safe Harbour. A successful SBR means that the director regains control of the company without the appointment of a liquidator and exposure to personal assets.

Proactively dealing with potential insolvency is vital. Consulting with professionals ensures you’re well-informed about appointing an external administrator or liquidator. Remember, as liquidators operate independently, they represent the company’s interests, not the individual directors.

At PCL Lawyers, we offer comprehensive Insolvency Advice to help you effectively communicate with your appointed administrator or liquidator, especially when complex matters emerge. It’s essential to approach interactions with your liquidator with professionalism and caution.

Our lawyers can advise on a range of legal issues encountered throughout the insolvency period, including, but not limited to:

• Directors Duties and potential breaches
• Disputes involving Liquidators
• Audits by ASIC, ATO, and other regulatory bodies
• Alleged Phoenixing Activities
• Legalities related to disclosing Company Documents and Records
• Legal representation in public examinations
• Legal advice on subpoenas for production of documents

A Deed of Company Arrangement (DOCA) serves as a crucial legal agreement between a company and its creditors, outlining strategies for addressing outstanding debts as oppose to appointing a liquidatior. This agreement can be initiated either by the company’s directors or a shareholder, and it requires approval from a majority of creditors.

The successful implementation of a DOCA enables a company to sustain its operations, avoid liquidation expenses and offer creditors a more favourable outcome compared to liquidation. With an approved DOCA in place, the company may remain under the control of directors.

At PCL Lawyers, we can provide comprehensive advice to directors, shareholders and creditors on a DOCA.

When a company goes into liquidation, an independent liquidator assumes control who has fiduciary obligations and does not represent the interests of the company’s directors. The liquidator must submit their findings to ASIC and report any potential breaches of insolvency laws by the company or its directors.

It’s not unusual for liquidators to pursue the recovery of loans disbursed to directors or related entities. They can also review any payments made within the six months preceding the the filing of the winding up application or appointment of a liquidator, whichever is earlier. In some cases, a liquidator can claw back payments made to related party entities within a 4 year period. We strongly advise seeking legal advice from an experienced insolvency lawyer to help ensure you are protected from any adverse action from a liquidator.

Insolvency occurs when companies find themselves unable to pay their debts as and when they fall due. In the event of company liquidation, a liquidator is entrusted with the responsibility of gathering and realising the company’s assets and settling its debts.

Registered liquidators act in a fiduciary capacity, and often have total management control of the affairs, money and other property of a body corporate.

Liquidation can be initiated voluntarily by directors or shareholders engaging a liquidator or involuntarily through a court order subsequent to a creditor’s application seeking the company’s winding-up. This is often after a statutory demand has been issued and not complied with. A statutory demand is a test of solvency and should be treated with urgency.

In addition to having the power to sell assets, liquidators can initiate or defend legal proceedings on behalf of the company and scrutinise specific payments the company has made. Our insolvency lawyers in Sydney can provide guidance throughout this process, we offer scrutiny of the insolvency process and advocate for the best interests of our clients.

Administration serves as a mechanism to oversee the operations of a company that is either insolvent or is likely to be insolvent in the future. Unlike liquidation, administration allows the company to continue operating while restructuring its affairs. It can be initiated voluntarily by directly engaging an administrator.

Upon appointment, the administrator assumes control of the company with the aim of restructuring its affairs and enter into a binding arrangement with its creditors. They are tasked with scrutinising the company’s financial position, contracts, leases and providing creditors with insights into its ongoing operations. They advise creditors whether the creditors should accept a deed of company arrangement or vote to wind it up and appoint a liquidator. An administrator will favour a deed of company arrangement if the terms of the proposed arrangement gives a greater return to creditors as oppose to the appointment of a liquidator.

A successful administration results in the return of control of the company to the company’s director and company is no longer under external administration.

Restructuring provides a lifeline for small enterprises grappling with monetary challenges. This procedure empowers these companies to maintain command over their operations, assets, and overall dealings as they carve out a strategy to turn around their business, under the guiding hand of a restructuring specialist. Subsequently, they can propose a restructuring plan for negotiation with their creditors.

Our insolvency lawyers in Sydney are well-versed in effective strategies for companies undergoing a restructure. We can provide advice on eligibility assist with negotiations and draft necessary documentation to make the restructure effective.

With our objective perspective and extensive industry connections, we can tailor a strategy specifically for your company’s needs.

A statutory demand serves as a formal request for the settlement of a debt owed by a company within 21 days of its receipt. If this document is disregarded, it can lead to the liquidation of the company. Upon receiving a statutory demand, it’s important to seek legal advice promptly. A director has only 3 options to deal with the demand: firstly, pay the debt, secondly enter into an arrangement with the creditor and lastly make an application to the Supreme Court to set aside the statutory demand on the basis of a genuine dispute. These options must be made within the strict 21 days. The parties to a demand or a court does not have the power to extend this timeframe.

Should the statutory demand be defective, disputed or deemed invalid in any way, it’s necessary to apply to the Court to have the demand set aside. For a statutory demand to be successful it must adhere to strict requirements, it requires a diligent and thorough understanding of the law. They can be contested and if you have received a Statutory Demand we recommend getting expert advice as to the legitimacy and accuracy of the demand.

If a statutory demand is not settled within the 21-day timeframe, company insolvency is presumed. Consequently, the creditor issuing the demand may petition the Supreme or Federal Court to instigate winding-up proceedings, resulting in the company’s liquidation. Once a winding up application is filed, all company creditors can claim debts against the debtor company without the need to obtain a judgment or issue a statutory demand. A winding up application can still be prosecuted by another creditor even if you pay the original debt in full.

PCL Lawyers can help companies to address statutory demands and navigate the complex process of winding-up.

If you’re considering pursuing a debtor company using a Statutory Demand or involved in an insolvency situation our experienced Sydney lawyers can provide clarity and advise you of what options are available to you.

Speak to an insolvency lawyer today, the earlier legal advice is sought the more options and negotiation time you have.

Call us on 1300 795 893 or complete an online form and we will contact you.