A company originally operating within a larger group of entities providing electrical and project management services had entered into a payment arrangement of $90K/month from March 2017.  However the payment plan was breached in October 2017 when the Company could not meet their obligation under the payment arrangement as projects were under quoted and income was reduced.

The Company's liability to the ATO was $2.1M and outstanding employee entitlements were $177K with unsecured creditors totalling $679K.  The director advised that underquoting projects and labour hours required along with failure to maintain payment arrangement with the ATO due to depleted cashflow contributed to the failure. Veritas Advisory were appointed as Voluntary Administrators by the Director on 13 November 2017.

Veritas Advisory was able to negotiate a favourable Deed of Company Arrangement ("DOCA") with the Director allowing for a better return to creditors when compared to a Liquidation scenario.

The outcome of the appointment was that the negotiations allowed for parties to execute a DOCA with contributions of $500k.  The DOCA provided a more certain return while the successful outcome of voidable transactions and insolvent trading are undetermined.  The related party had forgone their claim to allow a greater return to unrelated unsecured creditors.

Employee entitlements were paid in full and were assumed by a related entity when employment was transferred.

Unrelated unsecured creditors received a divided of 14.51 cents in the dollar.

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