Where a receiver (neutral third party appointed by a court or a creditor) takes control of all or part of a company’s assets and operations. This typically occurs when the company is unable to meet its financial obligations and creditors seek to recover their debts.
Insolvency.
Receivership.
Voluntary Administration.
Voluntary administration (VA) is a formal insolvency process where an independent administrator takes over from the directors, assesses the firm’s financial situation and proposes a plan of action. VA grants protection from creditor actions while the creditors decide on the company’s future.
Deeds of Company Arrangement.
A Deed of Company Arrangement (DOCA) is a legally binding agreement between a company in financial distress and its creditors, outlining how the company’s affairs will be managed and how creditors will be dealt with.
Insolvent Liquidation.
A Creditors’ Voluntary Liquidation (CVL) is a formal insolvency process initiated by the directors of a financially distressed company when they determine that the company cannot continue trading due to insolvency.
Solvent Liquidation.
A Members’ Voluntary Liquidation (MVL) is a formal process used to wind up a solvent company where its shareholders (members) have decided to cease operations and distribute its assets.
