developments in deeds of company arrangement - DibbsBarker

prospective winding up. 3 DOCAs are designed to enable a company, through prudentadministration of its affairs in coordination with creditors, to return itself to solvency. 4A “Stocktake” report issued by the Joint Parliamentary Committee on Corporations andFinancial Services (Joint Committee) in 2004 reported that Deeds of CompanyArrangement represented around 40.5% of appointments of insolvency administrations. 5Views on the success of the DOCA as a form of voluntary administration have beenmixed. 6 The Joint Committee’s 2004 report highlighted a number of concerns over thefunction of DOCAs through attempts to oppress the interest of unsecured creditors andbolster the interests of selected stakeholders. 7 Changes have been made to the legislativeframework over the years to reflect some of these concerns. 8The current status of DOCAs is best summarised by McColl:“While DOCAs are a speedy, efficient, and often fair method of resolving solvencyissues and reinstating companies as a going concern, they bring with them the3 Ibid [54].4 Ibid [59].5Parliamentary Joint Committee on Corporations and Financial Services, CorporateInsolvency Laws: A Stocktake (Commonwealth of Australia Senate Printing Unit, ParliamentHouse, Canberra, 2004).6 See C Anderson, D Morrison, supra n 1.7 For an example of the concern over the use of the DOCA as an instrument of oppression see MHughes, “Oppression, prejudice and discrimination under deeds of company arrangement” (2000) 11Journal of Banking and Finance Law and Practice 124. See also Parliamentary Joint Committee onCorporations and Financial Services, Corporate Insolvency Laws: A Stocktake, ibid [5.21-5.25].8 See changes introduced into DOCA regime by Corporations Amendment (Insolvency) Act 2007 (Cth),and Australian Securities and Investment Commission, External administration: Deeds of companyarrangement involving a creditor’s trust (May 2005, RG 82).11899717 v1 Brisbane 05 08 094