I will describe briefly (?) below how the VA process runs. You will
find there is more detail toward the start, because we need to know
that now.

A separate email will describe helpful files and information on this
email group.


PROCESS
=======
Step 1:
Either the company directors, or a secured creditor, can appoint a
Voluntary Administrator(s) if the company does not have enough cash to
pay debts "as and when they fall due" (insolvent). In the Mobilesoft
case, it was the secured creditor that made the appointment.


Step 2:
Directors lose their power of control over the company. The
Administrator can decide to continue or stop trading. If they
continue, they are personally liable for costs incurred from their
appointment.

In Mobilesoft's case, this means that they will pay wages from Tuesday
onwards (whether they will take Tuesday as a half day or whole day is
a bit murky). The wages from 1 Aug to 20 Aug are very much in limbo.

Trade creditors will be asked to close off accounts and re-open new
accounts under a slightly different name.

In most cases, the Administrators can use the company assets to pay
these new debts.

Shareholders are prohibited from trading their MSO shares (EVEN
OFF-MARKET). This will impact anyone trying to shuffle assets to
family members, etc, or realise a capital loss.


Step 2a:
Within five days, the Administrators must hold a meeting of creditors.
At this meeting, creditors have the right to vote on an alternative
administrator, and/or to set up a "Creditors' Committee".

Salient points:
1. You can teleconference in. The law says you must meet the costs
of the teleconference (ie costs lie where they fall), and you are not
entitled to add this cost onto your claim.

1a. My intent at this stage is to use my own calling card to make
the call from the voicepoint in the conference room in Melbourne,
which others can attend. This is unless the Administrator offers to
set up a teleconference.

2. While there is a natural apprehension that the Administrator will
be biased in favour of the secured creditor, there is a serious
practical issue with creditors trying to replace the Administrator: if
they are successful, the secured creditor is very likely to appoint a
Receiver.

This means that creditors lose most of their rights, and most
receiverships will wind up the company.

3. I recommend joining the Committee of Creditors unless you're
TOTALLY uninterested - you cannot join later. You can always drop
out, or write out a power of attorney.

4. I'm not entirely sure what powers the Creditors' Committee has.



Step 3:
The Administrators have 21 days to prepare a report and recommend one
of four options:

1. Return control to directors (if solvent)
2. Liquidation
3. Deed of Company Arrangment
4. Adjournment of up to 60 more days.

They send this out with five days' notice of a meeting to vote on the
options. A liquidation is fairly obvious, but a Deed is not so
obvious - I will comment on this later.




Step 4:
This depends on the outcome from Step 3.



Along various points of the process there can be various actions by
creditors/directors/administrators - this is what can make the process
complex.

One of the major problems is it is hard for creditors to know their
rights - most creditors do not deal with this process more than once,
but this email group is a partial redress for that.



Hopefully that will get most people started, but people may also like
to look at "admin.pdf", available at
http://au.geocities.com/nick4mony/otm/

Nick Bishop, +613 96966800, Mob: +61438 366342
-----
Has Hird's herd heard about The Hurd?
[Explanation: James Hird is a footy player with the Essendon FC, The
Hurd is a system similar to Linux]
-oOo-