‘Solvency’ is defined in section 95A(1) of the Corporations Act 2001 as the ability to pay all debts as and when they become due and payable. A company that is not solvent is ‘insolvent’ and it is the legal obligation of the directors of that company to prevent insolvent trading.

If you are a director, a secured creditor or an unsecured creditor of a company, and you are dealing with a company that is in financial trouble, contact our team of corporate insolvency specialists who can help you understand:

  1. Whether the company is insolvent
    The first step is to determine whether or not the company has been, or is, trading insolvent.
  1. Whether the director of the company is personally liable
    Directors are personally liable if, at the time when the company incurred a debt, the company was insolvent and the director had reasonable grounds for suspecting the company was insolvent or would become so.
  1. Your rights and obligations in corporate insolvency
    There are differing rights and obligations for directors of a company, secured creditors or unsecured creditors, each of which have a substantial impact on the entity within corporate insolvency.
  1. Appropriate insolvency arrangement to wind up a company
    You may need to appoint a receiver, liquidator or voluntary administrator.
  1. Penalties
    Insolvent trading has both civil and criminal penalties which may see directors being disqualified from managing a company, incurring fines of up to $200,000 or receiving an order to pay compensation to the company equal to the loss suffered by creditors.
  1. Defences
    The Corporations Act provides a number of defences available to directors of companies which have been, or are, trading insolvent.

Our team of corporate insolvency specialists work closely with liquidators and receivers and will approach your corporate insolvency matter in a client friendly, outcomes-based and timely manner.

We appreciate that corporate insolvency can have a severe impact on a business and its director and firmly believe that corporate insolvency should not get in the way of running a business.

How we help directors

If you are a director that wants to know what to do in the event that your business is, or will, become insolvent, contact Antunes Lawyers so that we can:

  • Help you understand the warning signs of insolvent trading;
  • Inform you of the key principles you should take into account in preventing insolvent trading;
  • Review and analyse the financial obligations and conduct of the company;
  • Propose a business or financial restructure to prevent or mitigate insolvent trading;
  • Provide you with a comprehensive advice regarding the options available to you when it comes to insolvency of the company, including liquidation, receivership and voluntary administration;
  • Respond to allegations concerning breaches of directors duties;
  • Represent you in bringing or defending a claim in a court or tribunal.

How we help creditors

If you are a creditor trying to recover money from an insolvent company, contact Antunes Lawyers so that we can:

  • Ensure you receive the money you are owed as cost effectively as possible;
  • Prepare proofs of debt, retention of title claims and enforcement of security interests;
  • Reach a commercial resolution through informal and formal negotiation;
  • Assist you manage your debt recovery process through our unique and automated debt recovery facility so that you don’t need to engage lawyers to chase down future debts.

Talk to one of our expert lawyers today.