Conference paper
Restructuring in voluntary administration: Evidence from Australian listed public companies
Proceedings of the 2005 Accounting and Finance Association of Australian and New Zealand Conference, pp.1-14
Accounting & Finance Association of Australia and New Zealand (AFAANZ) Conference, 2005 (Melbourne, Australia, 03-Jul-2005–05-Jul-2005)
Accounting and Finance Association of Australia and New Zealand
2005
Abstract
Introduction of the statutory voluntary administration (VA) process in mid 1993 represented a significant change to corporate insolvency law in Australia in providing greater opportunity for companies to attempt to resolve their financial distress. The final decision regarding the administration outcome is determined by company creditors, who can conclude the relatively short administration period by supporting a deed of company arrangement (DOCA) or have the company wound-up in a statutory liquidation. The focus of this paper is on the relationship between financial information available at the time a company enters VA and the VA outcome. In particular, we explore how financial information that indicates a company's capacity to restructure its debt contracts and assets relates to the VA outcome. Cluster analysis is used to explore the financial profiles of companies that have three different VA outcomes, which are: liquidation, a deed of arrangement that provides for company reorganisation, or a deed of arrangement (or liquidating deed) that provides for sale of the company's business or assets. Our analysis indicates that (1) different financial profiles at the time of entering VA are associated with different VA outcomes and, (2) a company's ability to restructure its debt contracts and issue new financial claims against assets are critical to the VA outcome.
Details
- Title
- Restructuring in voluntary administration: Evidence from Australian listed public companies
- Authors
- James Routledge (Author) - Bond UniversityDavid Gadenne (Author) - Central Queensland University
- Publication details
- Proceedings of the 2005 Accounting and Finance Association of Australian and New Zealand Conference, pp.1-14
- Conference details
- Accounting & Finance Association of Australia and New Zealand (AFAANZ) Conference, 2005 (Melbourne, Australia, 03-Jul-2005–05-Jul-2005)
- Publisher
- Accounting and Finance Association of Australia and New Zealand
- Date published
- 2005
- ISBN
- 0975697617
- Copyright note
- Copyright © 2005 The Authors. Reproduced with permission of the copyright holder
- Organisation Unit
- University of the Sunshine Coast, Queensland; USC Business School - Legacy
- Language
- English
- Record Identifier
- 99449129702621
- Output Type
- Conference paper
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