Alternate use of the voluntary administration moratorium

How a VA can be used to deal with personal debt.

The voluntary administration (VA) process is used to restructure company debts. But what about a director's personal guarantee debts?

On The Pulse readers will be familiar with the VA concept, which was designed to increase the chances of a company's survival where it cannot pay its debts as and when they fall due, or if it is not possible, results in a better return to the creditors and members when compared to an immediate wind up of the company. This however does not cover all the benefits a VA can provide.

This article discusses how the VA process can minimise a director's exposure to a personal guarantee debt.

Recently, Christopher Darin was appointed as voluntary administrator of a franchisee business that was hit hard by the COVID-19 pandemic and despite the landlord providing free rent and rent deferrals, the business still fell a few months behind in rent. Apart from the landlord, the company did not