What are some examples of what can be offered in a Deed of Company Arrangement?Â
A DOCA can be extremely flexible and may be used to enable a company to continue to trade (under the supervision of a Deed Administrator) or in circumstances where the directors wish to make an offer to avoid some form of personal liability. A few examples of a DOCA may be as follows:
- An immediate one off payment (usually a third party contribution made by a director or shareholder) to creditors in full and final settlement of their claims.
- An immediate payment to creditors (usually a third party contribution made by a director or shareholder) with the possibility of a further payment to be made from the proceeds of litigation or through the realisation of assets.
- A series of payments to be made from the profits of ongoing trading for a specified period.
The above listing is by no means an exhaustive listing of the use of a DOCA.
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