Insolvency matters:

Insolvency is where a company is unable to pay its debts as and when they fall due. An insolvent company can be wound up voluntarily or by way of a creditor commencing legal proceedings against the company. At the time of a wind up, a liquidator/s will be appointed to investigate the financial affairs of the company, report to creditors and, if possible, issue a dividend to creditors as a payment for the debt owed in order of a creditor's priority. Secured creditors such as banks and finance providers will have priority over unsecured creditors.

Common disputes relating to insolvency include disputes about:

1. Whether the company is insolvent and if so, at what time?
2. Whether the directors continued to trade despite knowledge (whether it be actual or imputed knowledge) of the insolvency and what are the implications of such conduct?
3. Whether any preferential payments have been paid to creditors and whether the liquidators can demand repayment of the amount paid?
4. Have there been any unlawful related party transactions that can be set aside?
5. Whether a creditor/ consumer can commence legal proceedings against a director where the company is in liquidation?
6. Disputes with the liquidators as to their performance and their management of the liquidation more generally.

During an insolvency dispute, negotiation is typically the most common alternative dispute resolution process used. Other processes such as conciliation and mediation can incur additional costs and during times of financial hardship, may not be an option for an insolvent company.

If you wish to speak with one of our Insolvency Lawyers, please contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au to book an appointment.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.