Deed Of Company Arrangement
A Deed of Company Arrangement (“DOCA”) is a proposal put to creditors by the director(s) of a company in Voluntary Administration which binds all creditors.
A DOCA may, for example, include any of the following:
- payment of a lump sum
- payments over time
- disposal of some or all assets
- a restructure of the organisation; and / or
- a combination of any of the above.
The goal of a DOCA is to enable the company to continue trading and provide a better return to creditors than if the company was placed into liquidation. Once the DOCA is accepted by creditors, the DOCA legally binds the company’s creditors and allows for full and final settlement of the debts, even though the debts may not be paid in full.
The terms of the DOCA are made to suit the particular circumstances. DOCA’s can be quite simple or very complex. Usually the terms of the DOCA will be generated as a result of consultation between the director(s) and the Voluntary Administrator.
For a DOCA to become effective it needs to be approved at a meeting of creditors. The Voluntary Administrator will prepare and circulate a detailed report to creditors prior to the meeting, setting out details of the director(s) DOCA proposal and the Voluntary Administrators recommendation on whether or not it should be approved.
For further information regarding DOCA’s please contact our office.
Whether you are looking for help with your company, business or personal affairs, we can help you find a solution for your financial problems.