Your browser does not appear to support Javascript. Please check your settings, then enable javascript and reload the page.
Phone: (03) 9696-2885

Deed Of Company Arrangement

At APL Insolvency we specialize in helping business owners when their company is facing insolvency. We understand both the challenges and responsibilities directors must deal with including the need to take action when their company is having difficulty paying its debts.

If your company is experiencing financial difficulty, the team at APL is here to help you understand the options that may be available.

One of the options available to an insolvent company is to enter into a Deed of Company Arrangement (DOCA).

Here is some information about the DOCA process to help you understand more about DOCAs.

A pen and calculator on a desk
 

What is a Deed of Company Arrangement (DOCA)?

When your company is facing insolvency and is unable to pay its debts as and when they fall due, one of the available options is a VA. The VA process allows directors to appoint an administrator to their company and present a proposal to the company’s creditors.

If the majority of creditors (in both value and number) vote in favour of the directors’ proposal, the proposal is accepted and the company avoids liquidation. A Deed of Company Arrangement (DOCA) is then signed by the company, its directors and the administrator. In most cases, the administrator is appointed as deed administrator to oversee the DOCA.

A DOCA is a legally binding document that details the director’s proposal and the terms that must be complied with to satisfy the DOCA. It also contains terms that provide for the variation or termination of the DOCA.

When your company is facing insolvency and is unable to pay its debts as and when they fall due, one of the available options is a VA. The VA process allows directors to appoint an administrator to their company and present a proposal to the company’s creditors.

The deed administrator is required to monitor compliance with the DOCA. If the directors fail to make payments as and when required under the DOCA or otherwise fail to comply with the terms of the DOCA, the deed administrator may call a meeting of creditors to consider terminating the DOCA and placing the company into liquidation.

Otherwise, the deed administrator simply collects the funds due under the DOCA and distributes them according to the provisions of the DOCA or otherwise pro-rata to unsecured creditors with dividends paid based on each creditors’ claims.

Once all funds due under the DOCA have been collected and distributed to creditors and after all final administrative tasks have been completed by the deed administrator, the DOCA is considered completed.

People working at a desk
 

What are the potential outcomes of a DOCA?

In the best-case scenario, your company satisfies all the requirements of the DOCA and simply returns to normal trading. A successful DOCA may enable your company’s creditors to be paid some or all of their debts, your suppliers to keep a customer, your customers to continue to be supplied, your employees to keep their jobs and the company’s directors to focus on the recovery of the company and its future profitability

In the worst-case scenario, failure to comply with the terms of the DOCA results in its termination and your company is then wound up.

 

What are the likely costs of a DOCA?

Deed administrator’s fees are generally paid by out of deed funds with the approval of the company’s creditors.

If a DOCA proposal is not accepted by creditors, no DOCA is created and therefore there are no fees to be paid to a deed administrator.

The best way to protect your company is to seek advice early!

If your company is experiencing financial difficulties, now is the time to act.

At the first signs of financial stress, it is always best to seek advice from an experienced insolvency practitioner who can advise regarding the available options to help you maintain control of your company and deal with its debt and financial struggles. The sooner you speak to an insolvency expert, the more options may be available to you to help your company survive.

APL Insolvency has over 20+ years of experience in dealing with DOCAs and other forms of corporate insolvency.

If you are interested in learning more about DOCAs and how a DOCA may help your company, contact APL Insolvency today to arrange a free, no-obligation options assessment consultation.

Send Us A Message

Contact us using the form below and we'll get back to you as soon as possible

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.