What is a Deed of Company Arrangement?
A Deed of Company Arrangement (DOCA) allows businesses in danger of being liquidated to continue to trade. The Deed is prepared by an administrator and presented to creditors for approval. It is tailored to meet the specific requirements of both creditors and business. A DOCA can be beneficial to all parties as creditors can gain a better return on their investment than if the business was wound up immediately and the deed allows the business to continue trading. Creditors will also know how the assets and affairs of the business will be handled should it become insolvent or enters voluntary administration. Terms covered by a Deed of Arrangement include: Property available for paying to creditors Terms and nature of any moratorium Deed administrator appointed When and how the DOCA will run Order of proceeds of company assets will be distributed If and how the company will be released from its debts Date of claims the DOCA includes Payments to Creditors A DOCA can i...