Insolvency is not necessarily the end of the road, check out this case study.
When a company experiences financial distress – whether from creditor pressure, poor cash flow, or internal disputes – directors often fear that insolvency is the end of the road. In reality, voluntary administration (VA) can provide a vital pause, giving companies breathing room to assess alternatives and find a better path forward.
At Jones Partners, we’ve seen voluntary administration provide the space needed to restructure, preserve value, and keep Australian businesses trading.
What is Voluntary Administration?
Voluntary administration is a formal insolvency process where an independent insolvency professional takes control of a financially distressed company. This will immediately halt most creditor actions, buying time to properly assess the business and its future. The administrator then investigates the company’s position and proposes the best outcome – whether that be entering into a Deed of Company Arrangement (DOCA), selling the business as a going concern, or winding up.
What does Voluntary Administration do for clients?
Breathing Space
VA gives companies protection from creditor action, creating time to explore solutions.
Independent Assessment
An experienced administrator provides objective oversight and options for the future.
Better Outcomes
VA often preserves more value for all stakeholders compared to immediate liquidation.
Ligh at The End of The Tunnel
Many businesses emerge from VA stronger, with disputes resolved and operations stabilised.
A Jones Partners Case Study
We recently assisted two directors of a raw material supply company who had reached a deadlock over strategy and leadership. From the accountant’s perspective, the warning signs were becoming increasingly familiar: creditor pressure were chasing payments, cash flow was tightening, decisions were being delayed due to disagreements, and confidence in the business was deteriorating. The directors feared insolvency would mean the end of the business.
Through the appointment of a Voluntary Administrator, creditor action was paused and the immediate pressure was reduced. Behind the scenes, Jones Partners conducted a detailed review of the company’s financial position, assessed the viability of continuing to trade, engaged with creditors, and facilitated negotiations between the directors to identify a commercially achievable path forward. This independent oversight allowed stakeholders to focus on solutions rather than conflict.
The result was a successful Deed of Company Arrangement that restructured the company’s obligations and returned the business to solvency. The business avoided liquidation, preserved jobs, maintained supplier relationships, and continued trading, demonstrating how early intervention can transform a seemingly unworkable situation into a practical recovery outcome.
Steps to take
If you are advising clients facing financial distress:
- Explain that voluntary administration provides time to explore alternatives.
- Connect with an experienced insolvency practitioner who can independently determine if a VA best suits the unique circumstances.
At Jones Partners your clients initial consult is free. - Encourage them to act early – options narrow as creditor pressure increases.
Voluntary Administration Creates Time, Clarity, and Options
Financial distress doesn’t mean the end of a company. Voluntary administration provides breathing room, independent oversight, and the chance to reset. For directors and shareholders, it can be the difference between collapse and recovery.
We are here to help. If you need more support, follow the links below or call us.
Resources – Jones Partners
Case Study: A Voluntary Administration Success Story – Jones Partners
02 9251 5222
