For many years, Voluntary Administration (VA) has been one of the principal restructuring mechanisms available to Australian companies experiencing financial distress. Its purpose has always been clear: to provide an insolvent or potentially insolvent company with an opportunity to restructure its affairs or, where that is not possible, achieve a better outcome for creditors than an immediate liquidation. 

ASIC’s Report 836 is one of the most useful practical reviews of Australia’s restructuring framework published in recent years. It provides a practical and accessible analysis of the research and will be of interest to businesses — both small and large — experiencing financial difficulty, or those seeking to understand their options before financial pressure escalates. For professional advisers, the article provides a resource to assist discussions with clients about the importance of early assessment and the restructuring options that may be available. 

The introduction of the Small Business Restructuring (SBR) regime in 2021 inevitably raised an important question. 

Has Voluntary Administration become less relevant? 

ASIC’s recently released Report 836 – Review of Voluntary Administration and Deed of Company Arrangement Process: 2021–2025 provides the clearest answer yet. 

The report analysed selected data for 5,020 companies that entered VA during the review period and concludes that Voluntary Administration continues to play an important role in Australia’s corporate insolvency system, particularly for larger and more complex businesses. 

For directors, accountants, lawyers and restructuring professionals, the report offers something that has previously been unavailable: detailed evidence about when Voluntary Administration is being used, the outcomes it is producing and the types of businesses most likely to benefit. 

Importantly, it also confirms what many insolvency practitioners have observed in practice for years. 

Voluntary Administration has not been replaced by Small Business Restructuring.  The two processes serve different purposes. 

Why did ASIC undertake the review? 

This is the first time ASIC has published comprehensive data examining how Voluntary Administrations and Deeds of Company Arrangement (DOCAs) operate in practice. 

The review analysed appointments between 1 July 2021 and 30 June 2025 and sought to answer several important questions. 

• Which companies are using Voluntary Administration? 

• How often are DOCAs proposed? 

• How frequently are creditors approving those proposals? 

• What outcomes are ultimately being achieved? 

Rather than relying upon anecdotal experience, the report provides an evidence-based picture of how Australia’s restructuring framework is functioning. 

The key finding: Voluntary Administration remains highly relevant 

Perhaps the most significant conclusion is ASIC’s observation that Voluntary Administration remains an important restructuring tool, particularly for larger and more complex companies. 

That finding is important. 

Since the introduction of Small Business Restructuring, some commentators questioned whether VA would gradually become obsolete. 

ASIC’s data suggests otherwise. 

The review demonstrates that Voluntary Administration continues to provide outcomes that are often unavailable through an immediate winding up. 

That should not surprise experienced restructuring practitioners. 

The purpose of Voluntary Administration has never been limited to rescuing every business. It is to create an opportunity to examine whether value can be preserved, whether the business can continue operating, whether assets can be sold as a going concern, or whether creditors can achieve a better commercial outcome than an immediate liquidation. 

Those objectives remain just as relevant today as they were before the introduction of SBR. 

Deeds of Company Arrangement continue to play an important role 

One of the most interesting findings relates to the use of Deeds of Company Arrangement. 

ASIC found that approximately half of all appointments proceeding to a second creditors’ meeting involved a DOCA proposal. 

Even more significantly, 87 per cent of those proposals were accepted by creditors, meaning that approximately 44 per cent of all Voluntary Administrations ultimately resulted in an approved DOCA. 

Those figures demonstrate an important point. 

Creditors are prepared to support restructuring proposals where they believe the proposal offers a better commercial outcome than liquidation. 

That reflects the practical reality of insolvency. 

Creditors are rarely interested in restructuring for its own sake. 

They are interested in achieving the best financial outcome available. 

Where a properly prepared DOCA provides that opportunity, creditors are often willing to support it. 

Larger and more complex businesses benefit most 

ASIC’s review also identified a clear trend. 

The larger and more complex the business, the more likely it was that a DOCA would be approved. 

Appointments involving companies with liabilities exceeding $10 million were substantially more likely to result in an approved DOCA than appointments involving companies with liabilities below $250,000. 

This is entirely consistent with practical experience. 

Larger businesses frequently involve: 

• multiple secured and unsecured creditors; 

• significant employee entitlements; 

• complex contractual arrangements; 

• valuable goodwill; 

• ongoing customer relationships; and 

• businesses capable of continuing if financial pressures can be addressed. 

Voluntary Administration provides the flexibility required to deal with those issues. 

By contrast, many smaller companies have simpler balance sheets and fewer stakeholders, making alternative restructuring pathways more appropriate in some circumstances. 

Business rescue remains a central objective 

One of the most encouraging findings contained in the report concerns business continuity. 

ASIC reported that almost half of all approved DOCAs resulted in the company’s business continuing to trade after the deed was executed. 

That statistic reinforces an important principle. 

Voluntary Administration is not simply a process for closing businesses. 

When used appropriately, it is a restructuring tool designed to preserve viable businesses wherever possible. 

Sometimes that involves continuing to trade under existing ownership. 

Sometimes it involves selling the business as a going concern. 

Sometimes it allows creditor claims to be compromised while preserving enterprise value. 

Each outcome depends upon the circumstances of the individual company. 

Has Small Business Restructuring replaced Voluntary Administration? 

The short answer is no. 

ASIC’s review confirms that Small Business Restructuring and Voluntary Administration are complementary rather than competing processes. 

For smaller businesses, ASIC observed that SBR may be a more efficient and cost-effective option, depending upon the company’s circumstances. It also noted that appointments involving liabilities of less than $1 million were significantly less likely to result in an approved DOCA, with many of those companies proceeding directly to liquidation. 

This reflects the design of Australia’s restructuring framework. 

SBR was introduced to provide eligible small businesses with a simpler restructuring option. 

Voluntary Administration continues to provide the flexibility required for larger businesses and more complex restructurings. 

The question is therefore not which process is “better”. 

The question is which process is right for the particular business. 

Choosing the right restructuring pathway 

This is where professional judgement becomes critical. 

Every business experiencing financial distress is different. 

Some businesses have a viable underlying operation but require time to restructure their debts. 

Others need a sale process to preserve value. 

Some require negotiations with multiple secured lenders and major creditors. 

Others may no longer be commercially viable and should proceed directly to liquidation. 

The skill of an experienced restructuring specialist lies not in recommending the same solution in every case, but in carefully assessing the available options, explaining those options clearly and identifying the restructuring pathway most likely to achieve the best commercial outcome. 

Having acted as Voluntary Administrator in more than 150 appointments, I have seen first-hand that successful restructurings depend less on choosing a particular process than on choosing the right process early enough.  

What does the report mean for directors? 

For directors experiencing financial distress, the ASIC review contains an important message. 

Voluntary Administration remains a relevant and effective restructuring option. 

It has not been displaced by Small Business Restructuring. 

However, neither process should be viewed as a default solution. 

The most appropriate pathway will depend upon factors including: 

• the size of the business; 

• the complexity of its financial affairs; 

• the nature of its creditors; 

• whether the underlying business remains viable; and 

• the commercial objectives capable of being achieved. 

Those assessments are rarely straightforward. 

They require careful analysis of both the legal framework and the commercial realities facing the business. 

Final observations 

ASIC’s report provides valuable insight into how Australia’s restructuring framework is operating in practice. 

Perhaps its most important contribution is confirming that Voluntary Administration continues to play an essential role within Australia’s insolvency system. 

For larger and more complex businesses, it remains one of the most effective mechanisms for preserving value, restructuring debts and achieving better outcomes for creditors than an immediate winding up. 

For directors, the report also reinforces another important lesson. 

The decision is rarely whether to choose Voluntary Administration or Small Business Restructuring. 

The real question is whether advice is being sought early enough for those options to remain available. 

In my next article, I will examine that issue in more detail by considering when directors should begin exploring Voluntary Administration, Small Business Restructuring or Creditors’ Voluntary Liquidation, and how selecting the right restructuring pathway can make a significant difference to the outcome achieved. 

Our services 

Our digital booklet, Voluntary Administration vs Creditors’ Voluntary Liquidation Explained, is a practical resource for advisers and their clients, helping them understand the key differences between these two insolvency options. 

We also offer complimentary presentations for professional firms and their teams. 

David Levi has been appointed Voluntary Administrator to more than 150 companies, providing practical, real-world experience across a wide range of industries.