Question 1

A voluntary administrator must be a registered liquidator.

Accepted Answer

A) True 
 B)False  True

Question 2

When a receiver is appointed by a secured creditor, the receiver takes control of the company thereby displacing the directors from their position.

Accepted Answer

A) True 
 B)False  False

Question 3

What is voluntary administration? What are the aims of a voluntary administration?

Accepted Answer

Voluntary administration is a way for an insolvent company to have a moratorium or safety zone from creditors' claims while a decision is made about its future. It involves the appointment of a voluntary administrator.
Section 435A sets out the goals of the VA to maximise the chances that a company in difficulty will trade out, or otherwise to maximise the return for its stakeholders.

Question 4

Some provisions typically found in a deed of company arrangement include:

Accepted Answer

A)  An extinguishment of some or all of the company's debts; 
B)  Restricting the power of directors; 
C)  The imposition of jail terms for directors that have violated section 588G of the Corporations Act 2001 (Cth); 
D)  An order for priority of payments of the company's debts; 
E)  (a), (b) and (d) are provisions typically found in a deed of company arrangement. 
A)  An extinguishment of some or all of the company's debts; 
B)  Restricting the power of directors; 
C)  The imposition of jail terms for directors that have violated section 588G of the Corporations Act 2001 (Cth); 
D)  An order for priority of payments of the company's debts; 
E)  (a), (b) and (d) are provisions typically found in a deed of company arrangement.

Question 5

Mega Bank Ltd is a secured creditor of Wasted Ltd. Wasted Ltd recently appointed a voluntary administrator. Mega Bank Ltd wants to enforce its security interest. Which of the following is the best answer?

Accepted Answer

A)  Mega Bank Ltd cannot enforce its security interest because when a voluntary administrator is appointed proceedings against the company are frozen and there is a moratorium on civil proceedings against the company; 
B)  Mega Bank Ltd cannot enforce its security interest because secured creditors cannot do anything to enforce such interests until the company is out of administration unless its applies to the court for consent; 
C)  If Mega Bank Ltd perfected its security interest, it can enforce that interest at any time; 
D)  If Mega Bank Ltd had a security interest over all or substantially all of the assets of Wasted Ltd, it could enforce its security interest within 13 days after notice is given of the voluntary administrator's appointment; 
E)  In order to enforce the security ineptest, Mega Bank Ltd would need to get ASIC's consent to do so. 
A)  Mega Bank Ltd cannot enforce its security interest because when a voluntary administrator is appointed proceedings against the company are frozen and there is a moratorium on civil proceedings against the company; 
B)  Mega Bank Ltd cannot enforce its security interest because secured creditors cannot do anything to enforce such interests until the company is out of administration unless its applies to the court for consent; 
C)  If Mega Bank Ltd perfected its security interest, it can enforce that interest at any time; 
D)  If Mega Bank Ltd had a security interest over all or substantially all of the assets of Wasted Ltd, it could enforce its security interest within 13 days after notice is given of the voluntary administrator's appointment; 
E)  In order to enforce the security ineptest, Mega Bank Ltd would need to get ASIC's consent to do so.

Question 6

If a company fails to respond to a statutory demand within 21 days of being served, the court will presume the company is insolvent.

Accepted Answer

A) True 
 B)False

Question 7

What are the liabilities of the Receiver?

Accepted Answer

The receiver is personally liable to cre

Question 8

What are the effects on creditors, including secured creditors during voluntary administration?

Accepted Answer

Proceedings against the company are froz

Question 9

Which of the following parties can appoint a voluntary administrator?

Accepted Answer

A)  Unsecured creditors; 
B)  The company; 
C)  Secured creditors; 
D)  Shareholders; 
E)  A liquidator;
F) All the above;
G) Just (b), (c) and (e). 
A)  Unsecured creditors; 
B)  The company; 
C)  Secured creditors; 
D)  Shareholders; 
E)  A liquidator;
F) All the above;
G) Just (b), (c) and (e).

Question 10

What is the receiver's relationship to the company?

Accepted Answer

The receiver is regarded as an

Question 11

Which of the following power(s) do receivers have?

Accepted Answer

A)  Take possession and control of property; 
B)  Commence actions against the directors for breaches of their duty to avoid insolvent trading under section 588G of the Corporations Act 2001 (Cth); 
C)  Vote at shareholders' meetings; 
D)  Take possession of property not subject to the appointer's security interest; 
E)  All of the above. 
A)  Take possession and control of property; 
B)  Commence actions against the directors for breaches of their duty to avoid insolvent trading under section 588G of the Corporations Act 2001 (Cth); 
C)  Vote at shareholders' meetings; 
D)  Take possession of property not subject to the appointer's security interest; 
E)  All of the above.

Question 12

Explain what a statutory demand is and what happens if a company served with a statutory demand fails to respond.

Accepted Answer

A statutory demand is a form (see Form 5

Question 13

Jared is a secured creditor of Pineapple Ltd. Jared holds a security interest in the whole, or substantially the whole, of Pineapple Ltd's assets. Jared has standing to appoint a voluntary administrator for Pineapple Ltd.

Accepted Answer

A) True 
 B)False

Question 14

Explain the circumstances in which the court may presume that a company is insolvent for purposes of a compulsory winding up in insolvency.

Accepted Answer

to assist the Court in proving insolvenc

Question 15

There are only three possible outcomes to a voluntary administration - a deed of company arrangement, apply to wind the company up or return control of the company to the board of directors.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would not be a motivation for directors to appoint a voluntary administrator.

Accepted Answer

A)  The company is insolvent or nearing insolvency and the directors are desirous of avoiding liability under section 588G of the Corporations Act 2001 (Cth); 
B)  The directors are attempting to prevent creditors from enforcing guarantees which have been provided by the directors; 
C)  The liquidator wants to have a deed of company arrangement with the company's creditors; 
D)  The directors want to freeze outstanding litigation so they can deal with the company's property and exercise their powers as directors without the distraction of the litigation; 
E)  All the above would be possible motivations for directors to appoint a voluntary administrator to a company. 
A)  The company is insolvent or nearing insolvency and the directors are desirous of avoiding liability under section 588G of the Corporations Act 2001 (Cth); 
B)  The directors are attempting to prevent creditors from enforcing guarantees which have been provided by the directors; 
C)  The liquidator wants to have a deed of company arrangement with the company's creditors; 
D)  The directors want to freeze outstanding litigation so they can deal with the company's property and exercise their powers as directors without the distraction of the litigation; 
E)  All the above would be possible motivations for directors to appoint a voluntary administrator to a company.

Question 17

It is generally secured creditors who can appoint a receiver, although in some limited circumstances other parties such as ASIC have the right to appoint a receiver.

Accepted Answer

A) True 
 B)False

Question 18

What options are there for a company in voluntary administration?

Accepted Answer

The administrator appointed to review th

Question 19

A deed of company arrangement is binding on all creditors, the company, its offices, its members, the administrators and the Australian Taxation Office.

Accepted Answer

A) True 
 B)False

Question 20

What is a deed of company arrangement, and what matters does it cover?

Accepted Answer

The deed of company arrangement (DOCA) i

A voluntary administrator must be a registered liquidator.

When a receiver is appointed by a secured creditor, the receiver takes control of the company thereby displacing the directors from their position.

What is voluntary administration? What are the aims of a voluntary administration?

Some provisions typically found in a deed of company arrangement include:

Mega Bank Ltd is a secured creditor of Wasted Ltd. Wasted Ltd recently appointed a voluntary administrator. Mega Bank Ltd wants to enforce its security interest. Which of the following is the best answer?

If a company fails to respond to a statutory demand within 21 days of being served, the court will presume the company is insolvent.

What are the liabilities of the Receiver?

What are the effects on creditors, including secured creditors during voluntary administration?

Which of the following parties can appoint a voluntary administrator?

What is the receiver's relationship to the company?

Which of the following power(s) do receivers have?

Explain what a statutory demand is and what happens if a company served with a statutory demand fails to respond.

Jared is a secured creditor of Pineapple Ltd. Jared holds a security interest in the whole, or substantially the whole, of Pineapple Ltd's assets. Jared has standing to appoint a voluntary administrator for Pineapple Ltd.

Explain the circumstances in which the court may presume that a company is insolvent for purposes of a compulsory winding up in insolvency.

There are only three possible outcomes to a voluntary administration - a deed of company arrangement, apply to wind the company up or return control of the company to the board of directors.

Which of the following would not be a motivation for directors to appoint a voluntary administrator.

It is generally secured creditors who can appoint a receiver, although in some limited circumstances other parties such as ASIC have the right to appoint a receiver.

What options are there for a company in voluntary administration?

A deed of company arrangement is binding on all creditors, the company, its offices, its members, the administrators and the Australian Taxation Office.

What is a deed of company arrangement, and what matters does it cover?

Legal Issues in Events Promotion and Company Winding up

Business Organisations

Companies and Incorporation

Company Constitution

Membership, Members Power and Dividends

Members Remedies

Corporate Governance and Company Management

PART A: Directors and Officers Duties

PART B: Directors and Officers Duties

Financing a Company Via Equity or Debt

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Exam 11: Receivership and Administration

A voluntary administrator must be a registered liquidator.

When a receiver is appointed by a secured creditor, the receiver takes control of the company thereby displacing the directors from their position.

What is voluntary administration? What are the aims of a voluntary administration?

Some provisions typically found in a deed of company arrangement include:

Mega Bank Ltd is a secured creditor of Wasted Ltd. Wasted Ltd recently appointed a voluntary administrator. Mega Bank Ltd wants to enforce its security interest. Which of the following is the best answer?

If a company fails to respond to a statutory demand within 21 days of being served, the court will presume the company is insolvent.

What are the liabilities of the Receiver?

What are the effects on creditors, including secured creditors during voluntary administration?

Which of the following parties can appoint a voluntary administrator?

What is the receiver's relationship to the company?

Which of the following power(s) do receivers have?

Explain what a statutory demand is and what happens if a company served with a statutory demand fails to respond.

Jared is a secured creditor of Pineapple Ltd. Jared holds a security interest in the whole, or substantially the whole, of Pineapple Ltd's assets. Jared has standing to appoint a voluntary administrator for Pineapple Ltd.

Explain the circumstances in which the court may presume that a company is insolvent for purposes of a compulsory winding up in insolvency.

There are only three possible outcomes to a voluntary administration - a deed of company arrangement, apply to wind the company up or return control of the company to the board of directors.

Which of the following would not be a motivation for directors to appoint a voluntary administrator.

It is generally secured creditors who can appoint a receiver, although in some limited circumstances other parties such as ASIC have the right to appoint a receiver.

What options are there for a company in voluntary administration?

A deed of company arrangement is binding on all creditors, the company, its offices, its members, the administrators and the Australian Taxation Office.

What is a deed of company arrangement, and what matters does it cover?

Legal Issues in Events Promotion and Company Winding up

Business Organisations

Companies and Incorporation

Company Constitution

Membership, Members Power and Dividends

Members Remedies

Corporate Governance and Company Management

PART A: Directors and Officers Duties

PART B: Directors and Officers Duties

Financing a Company Via Equity or Debt

Filters