Annual Meeting & Annual Report – Liquidators of Voluntary Windings Up (whether members or creditors voluntary wings up) are required under section 508 of the corporations Act to either
(i) hold an annual meeting of members and creditors of the company; or
(ii) lodge an annual report with ASIC detailing the position of the winding up.
ASIC – The Australian Securities and Investments Commission
Associated Entity – in relation to a person, means;
- an entity (other than a company) that is, or has been, associated with the person; or
- a company that is, or has been, associated with the person at a time when the company is, or was, as the case may be, a private company.
Asset Shifting – The fraudulent moving of assets onto or off an entity’s financial statements in order to manipulate the appearance of the financial health of the entity.
AFSA - Australian Financial Security Authority
Bankrupt – a person:
Against whose estate a sequestration order has been made: or
Who has become bankrupt by virtue of the presentation of a debtor’s petition and remains undischarged (an undischarged bankrupt).
A discharged bankrupt is a bankrupt who has been discharged from bankruptcy under section 149 of the bankruptcy act.
Bankruptcy Notice – A notice issued by the official receiver to a debtor under section 41 of the bankruptcy act requiring the debtor to satisfy a judgment debt with a specific time period.
Blackmail – The offense of making an unwarranted demand with a threat of financial or person loss or harm to the person threatened, or for a personal gain to oneself.
Bribery – The offense relating to the improper influencing of a person in a position of trust.
Caveat – A notice, usually on a register, to place the public on notice that no action of a certain kind may be taken without first informing the person who gave notice. The most common use is placing a notice on the title of real property to protect an interest in that property.
Close Associate – (Corporations Act) of a director means;
- a relative or de facto spouse of the director; or
- a relative of a spouse, or of a de facto spouse of the director.
Committee of Creditors – A smaller body of creditors or its representatives (usually 3 to 7) that have been elected by the main body of creditors to represent them at meetings with the appointee to the insolvency estate. The committee has the same powers as the general body of creditors in making resolutions at meetings.
Composition – One of the two types of agreements that can be made between a bankrupt and their creditors (under section 73 of the bankruptcy Act) during bankruptcy. Acceptance of a proposal for a Composition will annul the bankruptcy.
Conflict of Interest – A position where an employee has an undisclosed interest in a transaction that adversely affects their employer (whether financial or otherwise).
Controller – in relation to property of a corporation;
a receiver, or receiver & manager, of that property; or
anyone else who )whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a charge (Mortgagee in Possession or their agents).
Corruption – An offense relating to the improper influencing of a person in a position of trust.
Creditor – an entity that is owed money by another.
Creditor’s Petition – an application (a petition) to the Courts to place a debtor into an insolvent estate (bankruptcy for a person or liquidation for a company) under an Order of the Court. The application is usually made by a creditor, or more than one creditor jointly, that has an unsatisfied Bankruptcy Notice or Statutory Demand. The application must be heard by the Courts.
Creditors’ Voluntary Winding Up – Is the winding up of an insolvent company under Part 5.5 of the Corporations Act. This type of winding up may be commenced through the Voluntary Administration provisions of the Corporations Act, or through a meeting of the company’s members through the voluntary winding up provisions.
Debt Agreement – means an agreement under section 185H of the Bankruptcy Act resulting from the acceptance of a debt agreement proposal under Part IX of the Bankruptcy Act.
Debt for Equity Swap – Where a company agrees to capitalize a debt, by setting off the amount payable by the company under the debt against an amount due by the creditor for an issue of shares.
Debtor – An entity that owes money to another (a creditor).
Debtor’s Petition – means a petition presented by a debtor against himself or herself and includes a petition presented against a partnership in pursuance of section 56 of the bankruptcy Act and a petition presented by joint debtors against themselves in pursuance of section 57 of the bankruptcy Act.
Deed of Company Arrangement – means a deed of company arrangement executed under Part 5.3A of the Corporations Act or such a deed as varied and in force from time to time. It is a formal arrangement entered into between an insolvent company and its creditors to resolve it outstanding debt without going into liquidation.
Dependant – in relation to bankrupt means a person who:
resides with the bankrupt; and
does not receive any income from a person other than the bankrupt or spouse or former spouse of the bankrupt and:
is wholly dependant on the bankrupt for economic support or partially dependant on the bankrupt and partially on the spouse or former spouse.
Director – A person who:
- is appointed to the position of director; or
- is appointed to the position of an alternate director and is acting in that capacity regardless of the name that is given to their position.
Unless the contrary intention appears, it also includes a person who is not validly appointed as a director, if:
- they act in the position of a director; or
- the director of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
Director Penalty Notice – A notice served by the Commissioner of Taxation on a director regarding a remittable amount, under the prompt Recovery Regime.
Disclaiming a Lease – The process where a liquidator of bankruptcy trustee formally terminates an ongoing lease (or other financial obligation), thereby activating the right of the financier to deal with the financed asset.
Doctrine of Exoneration – A principle in equity law that deals with the rights of co owners of property where one co owner has used that property as security for a loan that solely benefited that person. The Doctrine makes assumptions about the roles of principle and surety over the loan and the security.
Dividend – a payment from an insolvent estate on a proved claim in that estate. Dividends are paid under the provisions of the Corporations Act or Bankruptcy Act in the set priorities for different classes of creditors and “pro rata” to the creditors within the class.
Eligible Applicant (in relation to public Examinations) – in relation to a corporation, means:
- ASIC; or
- A liquidator or provisional liquidator of the corporation; or
- An administrator of the corporation; or
- An administrator of a deed of company arrangement executed by the corporation; or
- A person authorized in writing by ASIC to make:
- Applications under the division of Part 5.9 in which the expression occurs; or
- Such an application in relation to the corporation.
Embezzlement – A dishonest appropriation by an employee of money or property given to him on behalf of his employer. The offense is classified as a form of theft.
Employee Entitlements – Amounts owing the employees of the insolvent usually made up of outstanding wages, commissions etc; outstanding leave entitlements and redundancy payments. These entitlements are generally Priority claims in insolvent estates, but the level of that priority and the amount of the entitlement that is priority varies in certain circumstances.
Entity – means a natural person, company partnership or trust.
Examinable Affairs – in relation to a bankrupt means,
- the persons dealings, transactions property and affairs; and
- the financial affairs of an associated entity of the person, in so far as they are, or appear to be, relevant to the person or to any of his or her conduct, dealings, transactions, property and affairs.
In relation to a company means:
- the promotion, formation, management, administration or winding up of the corporation; or
- any other affairs of the corporation( including anything that is included in the corporation’s affairs because of section 53); or
- the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation’s examinable affairs because of paragraph (a) or (b)
Externally Administered – means a company:
- that is being wound up; or
- in respect of property of which a receiver, or a receiver and manager, has been appointed (whether or not by a court) and is acting; or
- that is under administration; or
- that has executed a deed of company arrangement that has not yet terminated; or
- that has entered into a compromise or arrangement with another person the administration of which has not been concluded.
Extortion – The offense of using ones position to take money or other benefit that is not due for the purpose of exercising that position.
Final Meeting of Creditors – Liquidators of Voluntary Windings Up (whether Members or Creditors Voluntary Wings Up) are required under section 509 of the corporations Act to hold a final meeting of members and creditors of the company to advise of the finalization of the winding up and present a the final accounts of the winding up.
Floating Charge – includes a charge that conferred a floating security at the time of its creation but has since become a fixed or specific charge.
Forensic Accounting – The application of accounting and business knowledge to purposes of law. E.g. detecting fraud, analyzing or reconstructing books and records.
Forgery – The offense of making a false instrument or document so that it may be passed off as the original.
Fraud – A False representation (a deception) by means of a false statement or conduct in order to gain an advantage (usually commercial) over another.
Ghost Employee – An employee that is falsely entered into the records of a company as a current employee but that does not work for the company.
Holding Company – in relation to a body corporate, means a body corporate of which the first body corporate is a subsidiary.
Identity Theft – Stealing personal information about an individual and setting yourself up with that person’s identity. This usually used to conduct fraud on financial institutions in the victims name, leaving the victim with the debts.
Incapacitated Entity – An entity that is in liquidation or receivership, or which has a representative appointed; and a person that in bankrupt or who has entered into some arrangement under the Bankruptcy Act.
Income Contribution Assessment – The assessment of a bankrupt’s income by their Trustee to determine whether the bankrupt is liable under the Bankruptcy Act to pay a contribution to their estate.
Indemnity – An enforceable agreement by one person to pay another person sums of money that are owed, or may become owed, due to a costs, loss or damage, especially in the form of financial compensation.
Insolvent – A State of not being able to satisfy ones debts as and when they become due and payable. Insolvency can also be deemed for non-satisfaction of a Bankruptcy Notice or a Statutory Demand.
Insolvent Trading – A claim that a liquidator of a company may make against a Director of that company for compensation. The amount of compensation is calculated on the amounts of debts incurred by the company, that remains unpaid at the time liquidation and that were incurred when the director knew or should have known, that the company was insolvent.
Insolvent under Administration – means a person who:
- under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or
- under the law of an external Territory or the law of a foreign country, has the status of an undischarged bankrupt; and includes:
- a person any of whose property is subject to control under:
- section 50 or Division 2 of Part X of the Bankruptcy Act 1966; or
- a corresponding provision of the law of an external territory or the law of a foreign country; or
- Part X of the Bankruptcy Act 1966; or
- The corresponding provisions of the law of an external territory or the law of a foreign country;
Territory or the law of a foreign country;
Where the terms of the agreement have not been fully complied with.
Joint Tenancy – Ownership of land by two or more persons who have identical interests in the whole of the land. Joint Tenancy can arise only when 4 conditions are satisfied:
- Each joint tenant is entitled to possession at the same time;
- The interests must be identical
- Each must have the same title
- The interests must exist at the same time.
Judgement – means a judgement, decree or order, whether final or interlocutory, obtained by way of a decision of a court, made pursuant to an application to the court to make that decision.
Kickbacks – Also referred to as “Secret Commissions”. The payment of money or some other consideration to a business employee or official for the effect of influencing a decision.
Lapping – A term used to describe a technique used to hind fraud, whereby a new fraud is committed and the proceeds used (at least in part) to hide or resolve the initial fraud. This technique can be used in a never-ending cycle. This technique is commonly used when monies are being skimmed from businesses.
Lease – A contract under which the lessor grants the lessee exclusive possession of the property for an agreed period, usually in return for rental and, sometimes, a capital sum called the premium. These are to be distinguished from Chattel Mortgages that are a security over assets owned by the entity or person.
Liquidation – The process of winding up a company’s affairs, having a liquidator appointed to the company, whether it solvent (members voluntary winding up) or insolvent (creditors voluntary winding up or Official Liquidation by the Courts).
Liquidator – A personal able to be appointed to oversee the winding up of a company. See “Registered Liquidator” and “Official Liquidator”