Voluntary administration and earlier distress calls
An article from Gareth Hoole, director Corporate Recovery Services Unit, Staples Rodway, Auckland. The long-awaited Insolvency Law Reform Bill has finally emerged and addresses the equally long-awaited and much-debated topic of voluntary administration (VA). It is a fact of commerce that some businesses will fail, even in times of economic strength and buoyancy. It is not disputed that in some such cases, where the state of the company has deteriorated beyond repair, the only logical outcome is liquidation. All too often, one has to wonder whether the company and the jobs of its employees could have been saved through earlier intervention. Voluntary administration provides for the appointment of an administrator who takes charge of the company and prepares a rehabilitation plan that is then presented to the creditors for their approval.
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