SPOTLIGHT ON VOLUNTARY ADMINISTRATIONS

ASIC’s Report 836, Review of voluntary administration and deed of company arrangement process: 2021–2025, provides the most detailed public review to date of how Australia’s voluntary administration (VA) and deed of company arrangement (DOCA) regime is operating. The report analyses 5,020 companies that entered VA between 1 July 2021 and 30 June 2025, grouped into 3,528 appointments to avoid double counting related-company administrations. ASIC also reviewed 1,500 appointments that proceeded to a DOCA, including 1,100 finalised DOCAs and 400 that remained ongoing as at 31 May 2026.

KEY FINDINGS FROM ASIC REPORT 386

ASIC found that VA appointments increased during the review period, but VA’s share of all external administrations continued to decline. VA represented ~35% to 40% of external administrations in the early 2000s, declining to ~10% in FY25 and FY26. This reduction has occurred alongside the growth of small business restructuring, which appears to be providing an alternative pathway for some smaller companies seeking to restructure.

Notwithstanding that shift, the data does not show VA becoming irrelevant for smaller companies. The proportion of VA appointments with less than $1 million in liabilities remained broadly stable across the review period. However, outcomes varied significantly by company size. Larger appointments were materially more likely to result in an approved DOCA: 

• 48.3% of appointments with liabilities above $10 million entered a DOCA, compared with
• 15.4% of appointments with liabilities between $1 and $250,000.
• Smaller appointments were more likely to proceed directly to liquidation without a DOCA proposal being put to creditors.

We note that when directors consider the costs of a Voluntary Administration / DOCA Process on companies with debts less than $250,000, the payment of employee entitlements and the payment of a distribution to unsecured creditors, the directors are better off paying all their debts in full (if possible), or winding up the company, and acquiring any vehicles / assets from the liquidator at market value. 

ASIC’s review also highlights the importance of creditor returns and DOCA structure. Around 44% of overall VAs resulted in creditors accepting a DOCA. Among wholly effectuated DOCAs, almost 90% paid a dividend to unsecured creditors, with an average dividend of 21 cents in the dollar and a median dividend of 11.5 cents. DOCAs frequently involved external funding, compromise of debts, exclusion of related-party claims, continued trading or business and asset sales. These features demonstrate the capacity of a well-structured VA and DOCA process to preserve value and produce an outcome that may be superior to liquidation.

WHY EXPERIENCED VOLUNTARY ADVISERS MATTER

ASIC’s conclusions align closely with the role of experienced voluntary administration advisers. Effective VA work is not simply procedural. It requires rapid diagnosis, creditor engagement, financial analysis, trading and cashflow assessment, statutory reporting, stakeholder communication and the design of a restructuring or realisation strategy that is capable of being supported by creditors.

Wexted Advisors’ voluntary administration credentials are reflected in its experience across a broad range of appointments and industries. Wexted Advisors examples include Riverd Pty Ltd, Tahmoor Coal Pty Ltd, Adcon Vic Pty Ltd, Comlek Group, Sargon Capital Pty Limited, Yabonza Group Pty Ltd, Fleet Technologies Limited, Object Consulting Pty Limited and Pub Invest Group to name a few. Further details available on the Wexted website https://wexted.com/creditors. This breadth is relevant because ASIC’s report shows that VA outcomes differ materially according to size, complexity, creditor profile, funding availability and whether a viable DOCA proposal can be developed.

Wexted Advisors’ approach is consistent with the core value proposition identified by ASIC: preserving and realising value where possible, while providing a transparent process for creditors to make an informed decision. In practice, that requires administrators who can quickly identify whether the business should trade on, whether a sale process is viable, whether third-party funding is available, whether related-party claims should be compromised or excluded, and whether the proposed outcome is likely to produce a better return than liquidation.

Wexted Advisors acknowledge the costs of a Voluntary Administration process is front of mind for directors and stakeholders, and have seen instances where certain firms stack simple administrations with up to nine partners charging at over $1,100 per hour. Wexted Advisors generally seeks to limit voluntary administration appointments to two partners, and on more complex matters three partners. 

PRACTICAL IMPLICATIONS FOR DIRECTORS, CREDITORS AND ADVISORS

The report reinforces a practical lesson for directors: timing matters. Where directors obtain advice early, engage constructively with stakeholders and present a credible restructuring pathway, VA can provide a controlled environment for investigating the company’s position, stabilising operations and formulating a proposal to creditors. Where advice is obtained too late, the company may have limited working capital, reduced goodwill, deteriorated supplier support and fewer restructuring options. ASIC’s observation that many smaller appointments end in liquidation without a DOCA proposal raises important questions about whether some companies are entering VA after value has already been materially eroded.

For creditors, the report confirms that VA remains an important forum for testing alternatives to liquidation. A DOCA proposal can provide a mechanism for third-party funding, staged contributions, debt compromises, asset realisations, trade-on strategies and the exclusion or subordination of related-party claims. Creditors should assess whether the proposal is properly funded, whether the administrator’s investigations are sufficient, whether the return compares favourably with liquidation and whether the proposed structure is capable of being implemented within a realistic timeframe.

For advisers, ASIC’s findings point to the continuing need for high-quality restructuring advice that is both commercial and evidence-based. The more complex the appointment, the more important it is to understand intercompany arrangements, secured creditor positions, trading risk, employee entitlements, related-party claims, asset sale options and the likely comparative outcomes of liquidation and a DOCA. The report also signals that transparency, reliable data and clear creditor reporting will remain central to confidence in the VA regime.

CONCLUSION

ASIC Report 836 confirms that voluntary administration remains a significant restructuring and insolvency tool, particularly where appointments are larger, more complex or capable of supporting a funded DOCA. The report also makes clear that VA is not a guaranteed rescue mechanism: its effectiveness depends on timing, available capital, creditor support, the quality of investigations and the commercial realism of any proposal.

For directors and advisers, the lesson is to engage early and obtain specialist advice before optionality is lost. For creditors, the lesson is to scrutinise proposals carefully but recognise that a well-designed DOCA may produce a superior outcome to liquidation.  

Wexted Advisors acknowledge that all creditors prefer the payment of their outstanding debts in full (100 cents in the dollar) and agree with creditors that companies should pay their debts as and when they fall due (and in full).  Wexted encourages DOCA Proponents to offer a “cents in the dollar” return to creditors as high as possible, and highlights to creditors that they should carefully consider the alternate potential returns in a liquidation, as the potential recoveries in a liquidation process can be time-consuming and expensive processes to undertake, and may not generate returns at the level creditors expect. 

For businesses facing financial distress, experienced voluntary administration advisers such as Wexted Advisors can play a critical role in stabilising the position, developing credible options and assisting stakeholders to make informed decisions in a compressed and highly regulated timeframe.

For further information on Voluntary Administrations is available on the Wexted Advisors website https://wexted.com/services/insolvency/voluntary-administration