Voluntary Administration And Its Applicability †Free Samples

Question: Discuss about the Voluntary Administration And Its Applicability. Answer: Introduction: The objective of the report is to make a clear conception regarding the voluntary administration and its applicability on the company-based disputes. In this report, problem faced by the TS Development has been described and a back history of the company and the problem faced by the company has been discussed. The definition of the voluntary administration in this case and the achievement, if any, of the administrator has been highlighted[1]. It is important to decide the issue whether there is any necessity to apply this formula to resolve a company related problem or not. Discussion: History of the company: The present company is a building company having its head office at Adelaide, Australia. The main subject of the company is to make middle density construction and the company has fifteen years experience in this ground. Tom Morgan has founded the company and he is the present Managing Director of the company. The company is running its trade business under the purview of two subsidiary companies such as Somerset Morgan and Evoque Construction. It has been reported that the company is recently suffering from the family dispute and that affected its business and remain many customers being dissatisfied with its services. Mishap to the company: For many times, the company has been suffering from certain family disputes and the financial dispute regarding the company has been pointed out regarding the southern suburb property. It has been observed that the company is running its business through two subsidiaries companies. However, the projects undertaken by both the companies were lengthy and the company has to face various problems regarding the same. The foremost affected version regarding the problem is the financial crisis and it has been noticed that the company failed to complete the project and many clients have gotten incomplete flats. This affected the reputation of the company and sustained millions of dollar liabilities for the property development[2]. Voluntary administration: Voluntary administration can be treated as an option for the liquidation of an insolvent company. In this process, the responsibility of assessing the assets of the company is being entrusted on the hands of an independent person and he summarise all the availabilities resolving the crisis and states the best option for the improvement of the condition of the company as well as the owner and the creditors[3]. The company can appoint a voluntary administrator if majority of the company will deliver their consent for the settlement. Necessity of voluntary administration: It is a speedy process and the parties are choosing the option to avoid the complexity of the court. It is an established provision of the law that when the process of voluntary administration has been going on, no personal guarantee against the director of the company can be taken by anyone. The creditors of the company can get certain chances to chalk out certain review regarding the director of the company and it facilitates the process of negotiation in between the company and the creditors. Role of the voluntary administrator in this case: Mackay Goodwin was appointed as the voluntary administrator in the case and the reason behind the appointment or choosing the option of administrator was that the founder of the company did not want to wound up the company. The role of the administrator is to assess the probabilities and prepare a Deed of Company Agreement (DOCA). The administrators investigate into the company affairs and help to facilitate the process of implementation. DOCA is an agreement where the process of assets division of the company is described. To resolve the issue whether the problem regarding the company has been sought out by the administrator or not, the opinion of the director of the company should take into consideration[4]. Result of the case: It has been noticed that the managing director of the company was very much pleased with the works of the administrators and it has been observed that the administrators, to certain extent, succeed to resolve the financial crisis and problem between the company director and the creditors. The administrators had able to save the company from being wound up. Recommendation: It is a reported fact that the success parameters regarding the administrators process is not good. It has been noticed that only 27% cases has achieved the main goal. The recommendation should be in favour of the court process for the long lasting effect as the advice of the voluntary administration is lasting for five weeks. Besides that, the process is also hectic some. It is not required that every party will follow the guidelines of the administration. On the other hand, the decision of the court is binding in nature and the parties are forced to abide by the order, else judicial process will be initiated against them. It is also recommended that the process of voluntary administration be based on the DOCA and initiate negotiation process between the company and the creditors. Conclusion: It can therefore be stated that the present case has been solved by the interference of the voluntary administration[5]. However, apparently the process is low expensive and it enhanced to avoid the complexity of the court. Still, the decision process of the court and the validity of the court judgment is far better than the administrators. 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