A Global IT Company

• The IT company owed $2.5 million to its secured financier,
• Employees were owed $750,000 in unpaid superannuation and entitlements,
• The company owed $3.8 million in unsecured creditors, $3.3 million relating to taxation obligations.

• The Company was part of a group of 10 companies which provided IT workforce and system integration services to Banking and Financial institutions, Supply Chain and Logistics businesses, and Government Departments.
• During the 12 months prior to appointment, the Company had been negotiating the sale of a division of its business. The sale process was progressing at a slow pace and the company was continuing to incur trading losses in the meantime.
• The Australian Taxation Office (‘ATO’) had issued a Director Penalty Notice (‘DPN’) given the size of the debt that had accrued.

In our free consultation we discussed whether the director wanted to continue operating, the ability for the sale of business to complete, the profitability of the business post-sale and the impact of Liquidation on the business.
Based on this situation, a Voluntary Administration was the most suitable option for the company. With an extension of the Voluntary Administration period, this allowed for the Voluntary Administrator to complete the negotiation and settle sale of the division of the Company, restructure its operations to establish an appropriate cost base for servicing its reduced income levels. This enabled the Company to make an offer of a return to creditors based upon the surplus sale proceeds available after the secured creditor was paid in full together with a contribution from future profits achieved.

Creditors accepted the Deed of Company Arrangement which provided a return exceeding 66 cents in the dollar.

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