Various Administrations Explained
When a business goes bust it’s important for creditors to know their rights.
If you have queries or complaints regarding an insolvent company, you’ll need to contact the appointed external administrator.
An insolvent company is one that is unable to pay its debts when they’re due. The three most common insolvency procedures are: • voluntary administration • liquidation • receivership.
We regularly publish details of liquidated businesses in our Liquidated Companies List. Insolvency notices are also published in newspapers or can be found on The Australian Securities and Investments Commission (ASIC) website.
External administration is a term which covers all types of insolvency arrangements. An external administrator is also known as: • insolvency practitioner • voluntary administrator • liquidator • receiver.
Check our Liquidated Companies List Search which often includes details of external administrators.
Notices advising of most appointments of external administrators are also published in newspapers or on the administrator’s website. ASIC also provides contact details of external administrators.
Consumers as Unsecured Creditors
You will be affected by the appointment of an external administrator and may become an ‘unsecured creditor’ if you have:
- paid in full for goods or services to be collected or delivered later
- paid a deposit, such as in a lay-by agreement or interest-free offer
- bought a gift card or voucher and have not used it
- returned a product and have been issued a credit note.
When Will I Get My Money Back?
The Corporations Act 2001 specifies the order in which the external administrator has to repay money owed by a company to certain creditors.
Consumers will generally be considered ordinary unsecured creditors and will only be paid after monies owing to other classes of creditors, such as employees and shareholders, have been repaid.
Payments Made on Credit
Where you have paid for a product or service by credit (credit card or loan) and the product or service does not arrive because the company has gone into external administration, you may be able to request a chargeback on the transaction from your financial institution or bank that issued the credit card.
You should make this request as soon as possible as there may be time limits on chargeback claims.
If the Company is Still Trading
During a period of external administration companies often continue trading under the control of the external administrator. If the external administrator has announced that the company will honour specific offers or transactions – such as gift cards or lay-bys – you should follow the directions given by the administrator.
If the Company has Stopped Trading
If the company is no longer trading you will need to register with the external administrator as an Ordinary Unsecured Creditor to recover your money.
The insolvency process will decide whether you receive the goods you’ve paid for, or a full or partial refund, or possibly nothing at all.
Guarantees and Warranties
If you are concerned about guarantee or warranty claims on goods purchased through the company, you should contact the external administrator.