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Welcome to APL Insolvency

Like any phase of a business's evolution, the threat of insolvency can be managed effectively.

Contact APL Insolvency, the corporate advisory and insolvency specialists, on (03) 9696 2885 for advice on the best options available for you or your client..

circle icon    FACING FINANCIAL PROBLEMS?

Is your company facing financial problems? Is your business unable to pay its debts on time?

APL Insolvency specialises in dealing with companies facing financial difficulties.

Call APL Insolvency on 03) 9696 2885 for free and confidential advice regarding your available options.


circle icon    INSOLVENCY APPOINTMENTS

APL Insolvency deals with all forms of corporate insolvency including:

  • Voluntary liquidations
  • Court liquidations
  • External administrations
  • DOCAs
  • Receiverships


circle icon    WHAT WILL IT COST?

Concerned about the potential costs of winding up your company?

APL Insolvency provides cost-effective insolvency services often at a consderably lower cost than the 'Big 4' accounting firms.

Call APL Insolvency on (03) 9696 2885.




ABOUT US

APL Insolvency is led by Jeremy (Jack) Abeyratne, a Liquidator with over 18 years insolvency experience.

The staff at APL Insolvency have broad commercial experience and are skilled in all types of insolvency.

  • JEREMY (JACK) ABEYRATNE
    Liquidator

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  • MANNY HILL
    Manager

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  • SAM PATEL
    Supervisor

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  • NICOLE ABEYRATNE
    Office Manager

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OUR SERVICES

APL Insolvency specialise in all forms of corporate insolvency including:

  • Voluntary liquidations
  • Court liquidations
  • External administrations
  • DOCAs
  • Receverships


FAQ

What is a creditors' voluntary liquidation?

A creditor's voluntary liquidation is a voluntary winding up process commenced by the directors and shareholders of company after they have decided that the company is insolvent and can not pay its debts as and when they fall due.


When does a creditors' voluntary liquidation usually occur?

Under the provisions of the Corporations Act 2001, company directors have an obligation to actively monitor their company's performance and to take appropriate action if they form the opnion that their company is insolvent and unable to pay its debts as and when they fall due.


What does the process involve?

The process of winding up a company as a creditor's voluntary liquidation is directed by the provisions of the Corporations Act 2001, commencing with the passing of appropriate resolutions by the company's directors and shareholders. The necessary documentation is usually prepared with the assistance of an insolvency practitioner and are public documents once lodged with ASIC.


What are directors responsibile for during a liquidation?

Once the company is in liquidation, the liquidator assumes control of the company's affairs and the company's directors no longer have the ability to deal with company property. Directors must provide the liquidator with the company's books and records and during the course of the liquidation, directors have an obligation to assist the liquidator as may be required.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What is a voluntary administration?

The voluntary administration process involves the appointment of an external administrator by the company's directors and allows a proposal to be put forward which, if accepted by the company's creditors, results in the company entering into a Deed of Company Arrangement (DOCA) and control of the company reverting to the directors.


How does a voluntary administration commence?

An administrator is usually appointed by the directors of a company after they have formed the opinion the company is insolvent and is unable to pay its debts as and when they fall due (similar to a creditor's voluntary liquidation). The appointment can also be made by a secured creditor in certain circumstances.


What is the difference between a voluntary administration and a liquidation?

The primary differences between a liquidation and a voluntary administraton is that while a liquidation is effectively the end of a company and is focused on winding up its affairs, a voluntary administration allows the directors to put a formal proposal to the company's creditors which is then voted on at a meeting of creditors.


How long does a voluntary administration take?

The administration process usually takes between three to five weeks (although extension of time are available in certain circumstances) during which the adminiustrator conducts an investigation into the company's affairs and prepares a report for creditors detailing the director's proposal and comparing the potential return to creditors under the proposal or in a liquidation scenario.


What happens if a DOCA proposal is accepted by creditors?

If a majority of creditors (in value and number) vote in favour of the directors' proposal, a DOCA is prepared and executed between the company and the Deed Administrator (usually the appointed external administrator) and control of the company returns to the directors. The Deed Administrator is then simply responsible for implementing the terms of the DOCA.


What happens if creditors vote against a DOCA proposal?

If a majority of creditors are not in favour of the proposal, they may vote for the company to be placed into liquidation.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What is a Directors' Penalty Notice?

A Directors' Penalty Notice issued by the Australian Taxation Office (ATO) can make a company's directors personally liable for company debts in certain circumstances. A DPN is is a form of enforcement used by the ATO to ensure a company director's is complying with its taxation obligations.


When is a Directors' Penalty Notice issued?

The Australian Taxation Office uses Directors' Penalty Notices to enforce payment of certain taxation liabilities - specifically, unpaid PAYG and Superannuation Guarantee Charge (SGC) liabilities.


Are all Directors' Penalty Notices alike?

There are actually two types of Directors' Penalty Notices - one type provides for directors to pay the outstanding taxes, or else appoint a liquidator or external administrator, within twenty one days or else they become personally liable for the company's outstanding tax debts.

The other type of Directors' Penalty Notices - the 'lockdown' DPN - makes directors personally liable for the outstanding taxes immediately. These are usually issued where a company's taxation liabilities have been unpaid and unreported for more than three months from their due date.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What happens to personal guarantees?

Creditors with personal guarantees (or director’s guarantees) are able to rely on that guarantee and pursue directors irrespective of any formal insolvency appointment.

In the event a dividend is paid to creditors during the course of an insolvency appointment, creditors holding personal guarantees may still seek to recover the unpaid portion of their debt.

Directors should review their records and carefully consider their position in respect to personal guarantees before proceeding with an insolvency appointment.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What happens to the directors’ credit rating?

An insolvency appointment may affect a director’s ability to obtain credit - it is up to each lender.

A record of the insolvency will be recorded on the ASIC database and also by credit reporting agencies, and can therefore be accessed by lenders checking the directors’ credit history (the director’s credit history will disclose details of companies wound up in the last seven years).

While liquidation is not the same as personal bankruptcy (that is, liquidation is a less serious event), and directors are not automatically liable for a company’s debts, a bad credit report and rating can affect a director’s borrowing options (although this may be more likely to be an issue applying for a business loan rather than applying for a personal credit card or loan).


What can be done?

Unfortunately, there is little that can be done about this.

If a director needs to obtain finance while a liquidation is ongoing, a liquidator may be able to provide a letter to assist the director provided no claims have been identified against the director.

Directors should seek their own advice and carefully consider their position in respect to their credit rating before proceeding with an insolvency appointment.

Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What happens to unpaid wages and employee entitlements?

Employees who lose wages and/or other entitlements due to their employer’s insolvency may be able to claim under the Federal Government’s Fair Entitlement Guarantee (“FEG”).

While capped, the scheme is quite generous, covering wages and other entitlements subject to certain limits however, it does not not cover unpaid superannuation.

The Federal Government advances funds to meet unpaid employee entitlements and “stands in the shoes” of employees in respect to those funds in the event of any subsequent dividend.


What about the claims of directors and their relatives?

Directors and their relatives are not entitled to claim under FEG. Directors and relatives are also subject to certain limits in respect to any claims for unpaid wages and/or other employee entitlements under the Corporations Act 2001, with a maximum of $3,500 treated as a priority debt and the balance of any claim ranking as an unsecured claim.

Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What is the definition of insolvency?

The Corporations Act 2001 defines insolvency as being when a company is unable to pay its debts as and when they fall due


Does it matter if there is a surplus of assets on the company's balance sheet?

A net surplus of assets on the company's balance sheet is an indication that the company may be solvent however, there are many factors that need to be considered when assessing a company's solvency with cashflow, in particular, being an important factor.


What if I have put a lot of money into the business?

The ability of directors to inject more funds into the company may be a factor when considering a company's solvency (and may potentially be a defence in the event of an insolvent trading claim against a director.. A company may not be insolvent if it's directors are able to provide sufficient funding to enable the company to meet its debts as and when they fall due.

However, the company may still be insolvent even if its directors have previously put a lot of money into the business if the company is unable to meet its current debts as and when they fall due.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

Be aware of signs of insolvency

Early recognition of the signs of insolvency can enable directors to consider their options and ACT rather than wait until the only option is to REACT.

This can result in a better outcome for both directors and creditors and potentially enable directors to avoid a liquidator pursuin an insolvent trading claims against them


Indicators of insolvency

There are a number of indicators of insolvency that a liquidator will look for during his investigations which may indicate that the company became insolvent at a particular point in time and that the company's directors knew, or should have known, that the company was insolvent

If the company continued to trade and incur liabilities that it was unable to pay following that date, the liquidator may issue an insolvent trading demand to the directors for those (poentially avoidable) debts that were incurred but remain unpaid.

The foillowing indicators may be signs of insolvency:

  •    - Continuing losses
  •    - Dishonoured cheques
  •    - Payment arrangements
  •    - Exceeding overdraft limits
  •    - Creditors unpaid outside trading terms
  •    - Suppliers requiring COD / stopping supply
  •    - Failure to maintain adequate books and records
  •    - Exceeding overdraft limits
  •    - Failure to pay statutory liabilities
  •    - Failure to meet statutory lodgements
  •    - Legal demands / judgments / warrants
  •    - Rounded sum payments to creditors
  •    - No access to external funding

Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What is insolvent trading?

An insolvent trading claim may be brought by against a company's directors in circumstances where a company has continued to trade - and incur liabilities - when the directors knew, or should have known, that the company was insolvent.

An insolvent trading claim is made against directors personally. Any assets or property owned by directors personally may therefore be at risk in the event of such a claim.


What does an insolvent trading claim involve?

For a liquidator to bring an insolvent trading claim against a company's directors, he must determine that the company became insolvent at a particular point in time, that the directors knew or should have know that the company was insolvent and that the company continued to incur liabilities that it was unable to pay

The amount of an insolvent trading claim relates to the amount of liabilities incurred following the company's insolvency (and which could potentially have been avoided if apprpriate action was taken once the company's insolveny was, or should have been, known by the directors.)


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

What are the potential costs of an insolvency appointment?

The costs of a liquidation or external administration are generally paid out of the realisation of company assets and/or other recoveries that may be available.

External administrators are usually remunerated on a time basis, subject to maintaining detailed timesheets, obtaining creditor approval for any fees to be drawn and sufficient funds being available.


What if the company has no assets?

When a company has few or no assets, directors are usually required to contribute towards covering the costs of the process.

While costs can vary widely depending on the particular circumstances or issues arising in an appointment, directors contributions are generally limited to covering intial, essential tasks and may be reduced if some assets can be identified.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019

How can APL Insolvency help?

APL Insolvency specialise in corporate insolvency matters, provding insolvency related advice and taking formal insolveny appointments.


Don't wait until it's too late!

Too often we see directors who - perhaps fearful of the possible costs or actions of a liquidator they think may be involved based on what they have heard - have waited too long to seek advice from a professional insolvency practitioner This often leads to a worse outcome for the company and for creditors, as well as increasing the risk that directors may be exposed to an insolvent trading claim against them personally.

Unfortunately, this (incorrect) view of the role and costs of insolvency practitioners persists, An initial consultation to discuss your company's affairs costs nothing but can provide important information regarding the options available to the company and the consequences of an insolvency appointment.


Contact APL Insolvency now

If you are considering appointing a liquidator or an external administrator, or else wish to discuss the available options or the potential consequences of an insolvency appointment, contact APL Insolvency now on (03) 9696 2885 for free and confidential advice.


Disclaimer

The above information is provided for information purposes only. No warranty express or implied is given in respect to the information provided and you should seek your own advice in that regard. It is not expected that readers will rely wholly on the information detailed above and accordingly, neither APL Insolvency nor any member of the firm bears any responsibility for any loss resulting from any error or omission in the above information.

Last Updated: 14.10.2019




CONTACT US
You can find us at Level 5, 150 Albert Road, South Melbourne, Victoria 3205.


Contact APL Insolvency for any insolvency queries:

location iconLevel 5, 150 Albert Rd, Sth Melbourne, Vic 3205

mail iconP. O. Box 841, Sth Melbourne, Vic 3205

phone icon(03) 9696 2885

post iconwww.aplinsolvency.com.au

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