The VA process involves the appointment of an administrator usually by the directors of the entity.
This is usually an alternative to liquidation and involves an independent administrator taking control of the company’s business operations.
There is a first meeting of creditors within 10 business days.
With the assistance of the administrator, the director (or another party) can propose a Deed of Company Arrangement as an alternative to liquidation.
The DOCA is very flexible and can provide for:-
- Continuation of the company’s business by the director or the administrator;
- Sale of the business;
- Compromise of key claims;
- Compromise of insolvent trading claims.
The DOCA is considered at the second meeting of creditors at which creditors can also resolve that the company be wound up (i.e. place in liquidation).