Voluntary administration: Patterns of corporate decline

James Routledge, David Morrison

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Australian companies in financial distress prefer to select the option of voluntary administration (VA) offered by Pt 5.3A of the Corporations Act 2001 (Cth). A board’s choice to enter a company into a VA is premised upon the idea that it is preferable to take early action when the business is facing solvency difficulty. Such early action allows for the possibility of rescuing the business. This article examines whether directors cause businesses to trade in extenuating financial circumstances for too long a period before entering the company into a VA thereby shortening the chances of a successful business rescue. The empirical analysis presented suggests that timely entry into a VA is critical, and that the VA process is not being used in a timely manner.
Original languageEnglish
Pages (from-to)95-107
Number of pages13
JournalCompany and Securities Law Journal
Volume27
Issue number2
Publication statusPublished - 2009

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Empirical analysis
Financial distress
Solvency

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Routledge, James ; Morrison, David. / Voluntary administration : Patterns of corporate decline. In: Company and Securities Law Journal. 2009 ; Vol. 27, No. 2. pp. 95-107.
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Routledge, J & Morrison, D 2009, 'Voluntary administration: Patterns of corporate decline' Company and Securities Law Journal, vol. 27, no. 2, pp. 95-107.

Voluntary administration : Patterns of corporate decline. / Routledge, James; Morrison, David.

In: Company and Securities Law Journal, Vol. 27, No. 2, 2009, p. 95-107.

Research output: Contribution to journalArticleResearchpeer-review

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JO - Company and Securities Law Journal

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