In recent years, we have seen the deed of company arrangement or "DOCA" being used in Australia by sophisticated investors as a restructuring tool of choice. This is primarily due to the swiftness in which a DOCA can be implemented and its flexibility to effect a broad range of restructuring transactions with relative ease.

To those familiar with both U.S. and Australian insolvency regimes, Australia's creditors' scheme of arrangement (Scheme) may appear, at first glance, to resemble a Chapter 11 restructuring in disguise. This is because both regimes facilitate creditor compromise, allow incumbent management to remain in control, involve court supervision and rely on class-based voting structures to approve a restructuring outcome.

It is well understood that Australia's voluntary administration regime provides companies and their administrators with significant flexibility to promote business restructurings. This is in large part due to the statutory moratorium afforded to insolvent companies, allowing breathing space for the administrator to work with relevant stakeholders to promote a sale and/or restructuring via a deed of company arrangement.

Imagine operating a company, only to find without any warning that the company’s bank accounts have been blocked. The immediate consequence is one of acute disruption and uncertainty. You learn that a winding-up petition has been filed against the company, triggering restrictions that effectively prevent it from carrying out ordinary financial transactions. At that point, a pressing question arises: how is the business expected to continue operating under such constraints?

The statutory restructuring plan mechanism, introduced by the Corporate Insolvency and Governance Act 2020, introduced a flexible, court-sanctioned tool to rescue financially distressed businesses. The take-up in England and Wales has been widespread, with several well-known names having plans approved. However, despite being available since summer 2020, Scottish restructuring plans remain remarkably rare.

A statutory demand is a formal notice under the Corporations Act 2001 (Cth) (Act) requiring a company to pay a debt or provide security within a prescribed timeframe. Ignoring it can have serious consequences, including insolvency proceedings. In an era of digital communication, can a statutory demand be validly served by email?

What does the law say?

Connected party transactions - transactions entered into between a company and persons or entities with a close relationship to it (such as directors, shareholders or group companies) - attract heightened scrutiny under the Insolvency Act 1986 (the Act). This is because connected parties are not independent of the transferring company and are often in a position to influence its decision‑making, giving rise to an increased risk that assets are transferred on non‑arm’s‑length terms.