Dictionary

An action or declaration which, if not carried through, can be used by a Creditor to apply to the Court to make a person Bankrupt.

A transaction that has taken place prior to a Personal Insolvency Agreement or bankruptcy that can be recovered or clawed back by the Trustee. They include transactions where less than market value has been paid for an asset in consideration of a transfer in ownership or a transfer has been made to defeat right of access by creditors or preferential payments are made to specific Creditor. A Trustee has the ability to recover the asset or difference in purchase price paid. Certain time limits apply to these transactions.

A court order providing for a party to enter another party’s premises and search for, inspect, take copies and remove specified materials. Such an order is obtained where it is believed a party may frustrate trial process by destroying or removing evidence. As with an application for a Mareva Injunction, an application to the court for an Anton Piller Order is almost always made ex-parte in order to maintain secrecy.

Australian Restructuring Insolvency & Turnaround Association, which is the leading professional organisation in Australia for external administrators/insolvency practitioners. The website is www.arita.com.au/

Anything a person owns before going bankrupt, or buys or receives during bankruptcy. Assets can be divided into two types ñ Divisible Assets and Exempt Assets.

A person against whose estate a sequestration order has been made or who has become a bankrupt by virtue of the presentation of a debtor’s petition.

A process where people, who cannot pay their debts become bankrupt to receive the protection of the Bankruptcy Act and their estate is administered by a Trustee. It allows for the fair distribution of property among creditors and the prosecution of dishonest debtors.

The Commonwealth legislation which covers bankruptcy, Part IX (Debts Agreements), and Part X (Personal Insolvency Agreements) arrangements. It deals with individuals not corporate entities, which are covered by the Corporations Act administered by the Australian Securities and Investments Commission.

A formal, final demand for payment of a debt by a creditor owed at least $5,000 on one or more final judgments or final orders. This notice is issued by the Official Receiver through the office of ITSA. Failure to pay within 21 days is an act of bankruptcy.

Refers to the process where all financial, structural and strategic aspects of a company in financial distress are analysed so as to devise and execute a plan of corporate financial renewal or recovery tailored to the business’s particular circumstances in order to return it to financial solvency, profitability and strategic viability.

The Company Auditors and Liquidators Disciplinary Board—the body that disciplines external administrators.

A form of security for a debt taken by a creditor over company assets. A mortgage is a type of charge.

A small group of creditors, or their representatives, often appointed by the creditors of a company at the first meeting in a voluntary administration. The committee’s role is to consult with the voluntary administrator and to receive and consider reports by the voluntary administrator. The committee may be called upon to approve the voluntary administrator’s fees. The voluntary administrator must report to the committee when it reasonably requires.

A small group of not more than 5 and not less than 3 creditors and shareholders, or their representatives, often appointed by the creditors and shareholders of a company in liquidation to assist the liquidator. The committee is often called on to approve the liquidator’s fees and sometimes to approve the compromise of debts or the entry into contracts extending beyond three months by the liquidator. A Committee is generally formed in more complex administrations and where there are a substantial number of Creditors.

Agree to accept a lesser sum in full payment of a debt.

An asset that might arise if a certain event occurs (e.g. a current legal action being taken by a company might result in an asset if the company wins the case).

A liability that might arise if a certain event occurs (e.g. a current legal action against a company might result in a liability if the company loses the case).

A shareholder who may be liable to contribute towards a company’s debts in a liquidation if their shares are not fully paid.

A person appointed by a secured creditor to deal with assets subject to a charge. Includes a receiver, and receiver and manager.

A person who is a private bankruptcy Trustee, ITSA or an eligible Solicitor who investigates a debtor’s financial affairs and calls a meeting of the Debtor’s Creditors under Part X of the Bankruptcy Act.

In the context of bankruptcy, the Court usually refers to the Federal Court of Australia or the Federal Magistrates Court of Australia. Both of these Courts can hear matters associated with personal insolvency.

A liquidation that starts as a result of a court order, made after an application to the court, usually by a creditor of the company.

An entity (person, corporation) to whom money is owed.

A means by which a creditor makes an application to the Court to make a Debtor bankrupt.

A separate legal arrangement set up to deal with creditor claims. Creditor claims can be transferred to a creditors’ trust as part of a deed of company arrangement.

A liquidation for insolvent companies, initiated by the company. Creditors may replace the liquidator appointed by the company in this type of liquidation.

Amounts periodically adjusted in accordance with the Consumer Price Index. Some are adjusted every quarter, others every six months. As an example they identify the value of assets that can be retained by a Bankrupt or the income a Bankrupt can retain before they are required by law to contribute towards their bankruptcy. The current amounts can be found at www.itsa.gov.au

A document acknowledging that a company undertakes to repay a sum of money lent to the company by the holder of the document.

An amount owed.

A person who owes a debt to a Creditor.