Deed Of Company Arrangement (DOCA)
One of the benefits of a DOCA is that it helps maximise the chances of your company continuing, or to provide a better return for creditors.
What is it?
A DOCA is a binding agreement between a company and its creditors that governs how the company’s affairs will be dealt with.
The process
If a DOCA is executed, then the administrator of your company will become administrator of the DOCA unless your creditors resolve otherwise. Your company must also execute a DOCA within 15 business days after the second creditors’ meeting. If this doesn’t happen, then the company will automatically go into liquidation, with the voluntary administrator becoming the liquidator. A DOCA also binds all unsecured creditors whether or not they voted against the proposal.
What you need to do
If your creditors vote to go down the path of a DOCA, you must execute one within 15 business days. If you are a creditor, before you decide how to vote, make sure you understand how the deed will affect the priority of payment of your debt or claim.
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