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Menzies Advisory

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Liquidators & Receivers - Gold Coast, Brisbane, Sydney, Melbourne Our expert team consists of Registered Liquidators and qualified Accountants.

Menzies Advisory Liquidators & Receivers are specialists in corporate insolvency, corporate turnarounds and corporate evaluations. We have over 40 years experience and offer professional, compassionate and trusted insolvency, company administration and consulting services. We understand the difficulties associated with external administration and seek to make this time as stress-free as possible for effected stakeholders. We have empathy for your situation.

21/10/2026

Everyone knows about unfair preferences. Fewer appreciate that uncommercial transactions under s588FB are often the more powerful recovery tool.

An uncommercial transaction is one where a reasonable person in the company's circumstances would not have entered into it, having regard to the benefits and detriments to the parties involved.

Common examples:
→ Selling assets to a related party below market value
→ Guaranteeing debts of related entities for no consideration
→ Paying inflated management fees to associated entities
→ Forgiving debts owed to the company
→ Granting security for existing unsecured debts of related parties

Why it matters:
→ Recovery period extends to 4 years for related-party transactions (2 years for others)
→ No requirement to prove the recipient knew of insolvency (unlike preferences)
→ Catches transactions structured to look commercial but lacking substance

For directors and advisors: the "related party friendly" arrangements that made sense when the company was healthy look very different through the lens of s588FB. If a company is heading toward insolvency, every related-party transaction is a candidate for later scrutiny.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

19/10/2026

Here's a scenario we see more often than you'd think:

A director signs personal guarantees for the company's bank facility, commercial lease, and key supplier accounts in 2018. In 2021, they sell their shares, resign as director, and move on to something else. In 2025, the company (now run by someone else entirely) fails.

Six months into the liquidation, the former director gets a demand letter. The bank is calling on the 2018 guarantee. So is the landlord. The claim runs to hundreds of thousands.

**Their reaction: "That's not possible. I haven't been involved in the company for years."**

Unfortunately, it usually is possible.

Why personal guarantees survive:

→ A guarantee is a **contract between the guarantor and the creditor** — the company isn't a party
→ Resigning as a director does **nothing** to the guarantee
→ Selling shares does **nothing** to the guarantee
→ Notifying ASIC does **nothing** to the guarantee
→ The guarantee continues until the **creditor formally releases it in writing**

What makes it worse:

→ Most commercial guarantees are drafted as "**all monies**" or "**continuing**" guarantees — they secure whatever the company owes the creditor at any point, including debts incurred long after the guarantor exited
→ Variations to the underlying facility (higher limits, new terms) usually **don't** discharge the guarantor if the guarantee expressly permits variation without notice
→ The creditor has no obligation to tell the guarantor when new credit is extended
→ The guarantor often has no visibility into the company's financial position after leaving

What departing directors should do:

→ **List every guarantee** signed during your tenure — bank facilities, leases, trade accounts, equipment finance, insurance, utilities
→ **Request formal written release** from each creditor as part of your exit
→ Where the creditor won't release (common with banks and landlords), **negotiate a replacement guarantor** from the incoming ownership
→ Get an **indemnity** from the incoming owners covering any residual exposure — worthwhile even if not perfect protection
→ Set a **diary reminder** to review the position annually until you're satisfied the exposure is closed
→ **Keep copies** of every guarantee, every release request, and every response

For advisors handling a director exit or business sale: personal guarantee release is one of the top items that gets missed in the transaction paperwork. Structuring the exit properly at the time costs nothing. Cleaning up an unreleased guarantee five years later is often impossible.

If you're a former director who's just received a demand under an old guarantee — don't ignore it, and don't pay it without advice. There are defences worth checking (drafting issues, whether the debt is properly attributable, whether the creditor has done anything to discharge the guarantor), but the window to raise them is short.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

15/10/2026

Every VA, SBR, and liquidation involves formal reports to creditors. If you're a creditor (or advising one), how you read those reports determines what you actually know.

What to look for:

**Statement of Company's Business Property Affairs and Circumstances**
The director's own account of what happened. Read it carefully — it often reveals the director's framing of causes and responsibility, which may differ from what the investigation later shows.

**Practitioner's opinion on solvency**
When did the company first become insolvent? This drives potential insolvent trading and voidable transaction claims. The date matters.

**Related-party disclosures**
Who owns what, who lent what, and who was paid what. Related-party creditors, related-party transactions, and related-party votes should all be identified.

**Estimated return to creditors**
Both under the current course (VA/DOCA/SBR proposal) and under a hypothetical liquidation. The comparison is required — creditors are entitled to weigh one against the other.

**Preliminary investigations**
Voidable transactions identified, potential recovery actions, director conduct issues, offences that may need reporting to ASIC. These sections tell you what the practitioner is actively looking at.

**Independence declaration (DIRRI)**
Any prior relationships between the practitioner, the company, directors, or referrers. If something looks off, ask about it before the meeting.

For creditors and advisors:

→ Reports are dense, and the summary at the front rarely tells the full story
→ The most important information is often in the appendices and comparative tables
→ Missing information is itself information — if a category is silent, it's worth asking why
→ You have the right to ask questions before voting; use it

A well-prepared creditor is a difficult creditor to sideline. Read the reports properly, and you'll know when to push and when to accept.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

13/10/2026

Most people assume once a company is deregistered, it's gone. Not quite.

Under s601AH of the Corporations Act, a deregistered company can be **reinstated** by:

→ **ASIC**, on its own application, or
→ **A person aggrieved** by the deregistration (typically a creditor, former officer, or member), by application to the court

Reinstatement returns the company to existence as if it had never been deregistered. All prior rights, liabilities, contracts, and property vest back in the company.

Why creditors bring these applications:

→ **A claim was overlooked at the time of deregistration.** The creditor needs the entity to exist so they can pursue it
→ **Voidable transactions need to be recovered.** A liquidator can only act if the company is on foot
→ **Directors need to be pursued for personal liability.** DPN, insolvent trading, and related claims often require the company to be in liquidation
→ **Assets have been discovered.** Property that was missed in the original wind-up needs a company to be attached to
→ **Third parties have claims that require the company as a party.** Litigation, insurance claims, statutory claims

The process:

→ Application to the Federal Court or state Supreme Court
→ Evidence supporting the claim to reinstate (interest of the applicant, justification, proposed next steps)
→ Notification to ASIC and any other identifiable interested parties
→ Court order for reinstatement
→ In most cases, a liquidator is appointed at the same time to conduct the affairs of the reinstated entity

For directors of previously wound up or deregistered companies: your position isn't necessarily closed off just because ASIC records show the company as deregistered. If a creditor has proper grounds, the company can come back — and so can the questions about your conduct.

For creditors sitting on claims against a deregistered company: don't assume the claim is gone. If the amount justifies it, reinstatement is a real option.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

09/10/2026

A company is a defendant (or plaintiff) in active proceedings. It then enters administration or liquidation. What happens to the litigation?

The mechanics differ depending on the appointment:

**Voluntary Administration**
An automatic **stay** applies. Proceedings against the company are frozen unless the administrator consents or the court grants leave. The administrator has to assess whether to continue, settle, or discontinue the company's own proceedings.

**Liquidation**
A similar stay applies under s471B for court-ordered liquidations. For voluntary liquidations, the stay is narrower but the practical effect is often similar. The liquidator inherits the litigation and decides its future.

**SBR**
The moratorium under the SBR provisions provides limited protection — proceedings can still be commenced or continued in some circumstances, and legal advice on the specific application is essential.

What the practitioner considers:

→ **Merits of the case** — is the company likely to win, lose, or somewhere in between?
→ **Cost vs recovery** — even winning claims cost money to run
→ **Litigation funding** — third-party funders may be interested in strong claims
→ **Set-off with counterclaims** — a strong claim can be offset against a defendant's own claim
→ **Insurance coverage** — D&O or general policies may respond
→ **Statutory priorities** — legal costs from continued litigation are typically administration expenses (priority)

For lawyers acting for or against companies in this position:

→ The stay is real — filing a next step without leave is procedurally void
→ Communication with the practitioner is essential, and comes first
→ Assumed positions from before the appointment (like "they'll settle before trial") may no longer hold — the practitioner has a different calculus

For directors: if you're in active litigation and considering an appointment, factor the litigation into the timing. The wrong appointment at the wrong time can convert a winnable case into a lost one.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

07/10/2026

At a creditors' meeting, the vote determines the outcome. In many cases, the largest creditor by value is a related party — the director's family trust, a group company, or a shareholder who's lent money in.

Australian insolvency law recognises the obvious risk: if related parties can vote their claims freely, they can determine the outcome regardless of what independent creditors want.

The safeguards:

→ **Related-party claims** must be disclosed in the practitioner's reports
→ **The chairperson at a creditors' meeting** has a casting vote and specific powers to discount or set aside related-party votes where necessary
→ **In an SBR context**, related-party creditors are specifically **excluded** from voting on the restructuring plan
→ **ASIC and the ATO** actively scrutinise resolutions where the outcome was determined by a related-party vote
→ **Voidable transaction provisions** apply retrospectively where a related party benefited from the outcome

Why the ATO is particularly attentive:

The ATO is often the largest independent creditor. In cases where a related party vote pushes through an outcome the ATO didn't support (a compromise, a specific liquidator appointment, or an unfavourable DOCA), the ATO has escalating options — from opposing the resolution at the meeting, to challenging it in court, to bringing separate recovery action later.

For advisors preparing a client for an insolvency process: if the numbers rely on related-party votes carrying the day, the plan is fragile. The independent creditor position needs to be the anchor, not the residual.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

01/10/2026

The Voluntary Administration ends when creditors vote to approve a DOCA. But the DOCA itself typically runs for months or years afterwards, supervised by a **Deed Administrator**.

The role, in practice:

→ **Collect the deed contributions** — usually a defined payment schedule from the company or a third party
→ **Deal with creditor claims** — adjudicate proofs of debt for the compromise pool
→ **Distribute deed funds** — periodic distributions to admitted creditors under the deed's priority regime
→ **Monitor company compliance** — the deed usually imposes ongoing obligations on the company (trading covenants, reporting, restricted transactions)
→ **Report to creditors** — required updates on progress against the deed terms
→ **Terminate the deed** — either on successful completion or on default

What often goes wrong:

→ **Deed contributions aren't made on time.** The Deed Administrator has to decide whether to enforce, negotiate, or terminate
→ **New disputes arise about creditor claims.** Late-lodged proofs, contingent claims, and set-off issues get complicated
→ **The company breaches operational covenants.** Trading restrictions, dividend prohibitions, related-party transaction limits all need monitoring
→ **A key stakeholder loses interest.** A funding third party pulls back, a key contract goes bad, or the director's circumstances change

If the deed is complied with, it typically ends with a release of creditor claims and the company continues.

If the deed defaults, termination usually leads to liquidation, and the compromise of debts is unwound — creditors revert to full claims.

For directors entering a DOCA: the signing is the beginning, not the end. The compliance obligations are real and enforced.

For creditors: staying informed on the deed's progress matters. The Deed Administrator's reports are the primary source of information — read them, and ask questions when something looks off.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

29/09/2026

Small Business Restructuring is unusual in that the practitioner works alongside the director rather than displacing them. That structure only works if the practitioner is genuinely independent.

The independence requirements:

→ The practitioner must be a **registered liquidator**
→ They must sign a **Declaration of Independence, Relevant Relationships and Indemnities (DIRRI)** at appointment, disclosing any prior dealings with the company, directors, or related entities
→ They must not have provided **material prior advice** to the company or its directors in the period before appointment (subject to some limited carve-outs)
→ They cannot become the **liquidator** of the same company if the SBR fails or ends
→ They cannot **hold financial interests** in the company or receive material benefits from any related party

Why this structure exists:

The whole point of SBR is that the director stays in control while a qualified professional oversees the restructuring plan and certifies it to creditors. If the practitioner has a prior relationship with the director, or a financial motive to see the process end in a particular way, that certification loses its value.

Practical implications:

→ The accountant or advisor who's been helping the client all along generally can't be the SBR practitioner
→ A "pre-insolvency advisor" who's been paid to prepare the plan and then wants to be appointed is a red flag
→ The practitioner's DIRRI is a public document — creditors and the ATO read it
→ Any undisclosed prior involvement can invalidate the whole process and expose the practitioner to ASIC sanction

For directors and their advisors: the practitioner you engage for an SBR needs to be at genuine arm's length from prior advisory work. That's not a technicality — it's the mechanism that gives the plan credibility with creditors.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

Address

Services Available In:
Southport, QLD
4212

Opening Hours

Monday	8:30am - 5pm
Tuesday	8:30am - 5pm
Wednesday	8:30am - 5pm
Thursday	8:30am - 5pm
Friday	8:30am - 5pm

Website

http://www.menziesadvisory.com.au/

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