A natural person appointed as a director of a company who is then responsible for directing and managing the affairs of a company. Also includes a shadow director.
Discharge from Bankruptcy
The date that the Bankrupt is discharged from bankruptcy.
A share of the profit of a solvent company paid to shareholders. Also used to describe a sum paid to creditors out of the assets of an insolvent company.
Assets/property which vest in the Trustee and can be legally sold by the Trustee.
Duration of Bankruptcy
The period of the bankruptcy, which ends three years from when a person files their Statement of Affairs with ITSA. The duration of bankruptcy can be longer if a Bankrupt does not lodge a Statement of Affairs or if an objection is lodged to extend the bankruptcy.
Eligible Employee Creditor
A creditor (including the Australian Taxation Office in respect of the superannuation guarantee charge) who, in a winding up of a company, would normally be paid their employment-related entitlements in priority to other unsecured debts. These creditors are given a special right to vote on a deed of company arrangement proposal that seeks to modify their priority.
Eligible Unsecured Creditor
A creditor who is entitled to have a say in a pooling determination made by a liquidator. The term generally covers the external unsecured creditors of the group, but excludes debts owing between companies in the pooled group. A pooling determination relates to a decision to treat the affairs of a group of companies as if it were a single external administration.
Means a court proceeding brought by a party without the knowledge of or in the presence of other parties.
An employee who has also been a director of the company, or a relative of a director, at any time in the 12 months before the appointment of an external administrator. Excluded employees are entitled to only limited priority for repayment of their outstanding entitlements.
Assets/property which cannot be sold in bankruptcy by the Trustee. These are identified in s116 of the Bankruptcy Act.
Extension of Bankruptcy
If a Bankrupt fails to co-operate with their Trustee, or fails to meet the requirements of the Bankruptcy Act, their bankruptcy can be extended (generally by an additional 2 or 5 years, depending upon the circumstances).
A general term for an external person formally appointed to a company or its property. Includes provisional liquidator, liquidator, voluntary administrator, deed administrator, controller, receiver, and receiver and manager. Other than a liquidator for a members voluntary liquidation and a controller who is not a receiver or receiver and manager, an external administrator is required to be registered by ASIC. An external administrator is sometimes also referred to as an insolvency practitioner.
The Fair Entitlements Guarantee – a basic payment scheme to assist employees who have lost their jobs as a result of their employers liquidation or bankruptcy, and are owed certain employee entitlements.
A charge taken by a lender over particular assets of a company. The company may not dispose of these assets without the consent of the lender.
A charge taken by a lender over general assets of a company. The company is usually able to use and dispose of these assets (e.g. stock, debtors) in the ordinary course of business without the secured creditors consent. A floating charge converts to a fixed charge over those assets if certain events listed in the charge document occur. These usually include the appointment of a liquidator or other external administrator.
Refers to the specialised branch of accounting which integrates accounting, auditing, and investigative skills so as to analyse, interpret, summarise and present complex financial and business related issues in a manner which is both understandable and properly supported and that, if required, can be presented in a court of law.
Items that a bankrupt is able to retain when they become bankrupt. A list of items can be found in Bankruptcy Regulation 6.03.
A sum of money that a Bankrupt is required to pay to their Trustee from their income. It is normally called a compulsory income contribution and is based on a statute based formula.
An agreement between the external administrator and a third party to cover the fees and other debts incurred by the external administrator.
Unable to pay all debts when they fall due for payment.
An asset with no identifiable physical form (e.g. a contractual right, copyrights, patents and goodwill).
A charge to be remitted to the Commonwealth (through ITSA) as the governing bankruptcy body. It is all net interest received on funds held in financial institutions for the bankruptcy, that is, interest received less bank charges.
A legal obligation to pay a person.
The orderly winding up of a companys affairs. It involves realising the companys assets, cessation or sale of its operations, distributing the proceeds of realisation among its creditors and distributing any surplus among its shareholders. The three types of liquidation are: court, creditors voluntary and members voluntary.
Refers to the provision of specialised accounting assistance to legal counsel in order to provide or explain accounting knowledge in a legal context.
Also known as a freezing order or asset protection order is a court order providing for the freezing of a defendants assets in order to prevent them from being disposed of or moved outside the jurisdiction of the court. The application for a Mareva Injunction is almost always made ex-partei to a judge in order to maintain secrecy. It is often accompanied by an order that provides for a party to provide documents or other information such that an allegation can be proven.
Member (of a company)
Motor Vehicle Limit
A bankrupt may retain vehicles (cars, motorbikes, etc) used primarily as a means transport up to this limit. The amount refers to the equity in the vehicle/s (the value of the vehicles less the sum owing under finance). The current limit is set out at www.itsa.gov.au
National Personal Insolvency Index. It is a computerised database of all personal insolvencies in Australia, both past and present.
Objection to Discharge
The period of bankruptcy can be extended by a Trustee in certain circumstances, which are set out in the Bankruptcy Act. When this occurs, the Trustee lodges an Objection with the Official Receiver at ITSA. Once it is registered on the NPII, it is a valid objection. A Trustee can lodge an objection on a number of grounds, including if a bankrupt fails to co-corporate, or fails to meet the requirements of the Bankruptcy Act. In this instance, a bankruptcy can be extended to a 5 or 8 year period from the date the bankrupt files their Statement of Affairs with ITSA. An objection is not a punitive measure and is only to be used to assist in making a Bankrupt comply with their duties. A Bankrupt has the right to appeal the lodgment of an objection to discharge.
A person who administers statutory functions under the Bankruptcy Act for the government/ITSA. The functions performed are different to a Trustee.
A natural person or a company.
In accordance with the PERSONAL PROPERTY SECURITIES ACT 2009 – SECT 10 “personal property” means property (including a licence) other than: (a) land; or (b) a right, entitlement or authority that is: (i)granted by or under a law of the Commonwealth, a State or a Territory; and (ii)declared by that law not to be personal property for the purposes of this Act. Note:This Act does not apply to certain interests even if they are interests in personal property (see section 8)
Poll (of creditors)
A voting procedure where both the number of creditors voting a particular way and the value of their debts is considered in deciding if a resolution is approved or not.
The practice of treating the affairs of a group of companies as if it were a single external administration.