News that Australias third-largest pizza chain Eagle Boys has been placed in administration suggests a bleak future may lie ahead for the company.
Administrators have indicated they are in the process of identifying restructuring measures”. But research by ARITAs Mark Wellard (formerly from QUT) on the effectiveness of voluntary administration indicates that a sustainable rescue is generally achievable in only a minority of cases.
Indeed ASIC has reported that failure rates of companies entering into voluntary administration are high, with 78% of companies being de-registered within five years.
The Corporations Act 2001 (Cth) makes it clear that the main objective of voluntary administration is to rescue an insolvent comp…
Read the full article at: http://theconversation.com/save-or-salvage-the-real-role-administrators-play-in-troubled-businesses-61912