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Menzies Advisory

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Liquidators & Receivers - Gold Coast, Brisbane, Sydney, Melbourne Our expert team consists of Registered Liquidators and qualified Accountants.

Menzies Advisory Liquidators & Receivers are specialists in corporate insolvency, corporate turnarounds and corporate evaluations. We have over 40 years experience and offer professional, compassionate and trusted insolvency, company administration and consulting services. We understand the difficulties associated with external administration and seek to make this time as stress-free as possible for effected stakeholders. We have empathy for your situation.

29/10/2026

Personal guarantees: what happens when the bank calls

Almost every commercial lease, bank facility, and material trade account carries a personal guarantee. Most directors sign them and move on. Very few think about them again — until the company can't pay.

What typically unfolds when a guarantee is called on:

**First**, the creditor demands payment. The demand doesn't require the company to have exhausted every option — the guarantee usually allows the creditor to proceed against the guarantor at any time after default.

**Second**, the guarantor becomes liable for the whole guaranteed amount, not just the shortfall.

**Third**, the guarantor's assets are exposed. Family home, investment properties, savings, and shareholdings can all be pursued through judgment enforcement.

Protections to check before it's too late:
→ Is the guarantee capped, and at what amount?
→ Does it have a fixed term or renew automatically?
→ Are there notice requirements for calling on it?
→ Was independent legal advice obtained at signing?
→ Has the primary debt been varied in ways that might discharge the guarantor?

For directors: audit your personal guarantees now, while the company is healthy. Know what you've signed and what it's worth.

27/10/2026

A liquidation isn't automatically a personal disaster for a director. But when it becomes one, the pathway is predictable.

**Stage 1 — Corporate insolvency.** Company is liquidated. Director loses control, but personal finances remain separate.

**Stage 2 — Personal claims crystallise.** DPN liabilities, personal guarantees, loan account demands, and insolvent trading claims become personal debts.

**Stage 3 — Demand and negotiation.** Creditors demand payment. Some negotiate; others (including the ATO) move quickly to enforcement.

**Stage 4 — Personal insolvency options.** If the director can't satisfy the claims:
→ Bankruptcy (voluntary or on a creditor's petition)
→ Personal Insolvency Agreement under Part X
→ Debt Agreement under Part IX — for lower-value debts

Each has different consequences for licences, credit, travel, and future business activity.

For directors: the corporate insolvency doesn't have to become a personal one, but the difference is usually made in the weeks after appointment — not months.

For advisors: don't assume a client whose company has failed is beyond helping. The personal position is usually still workable if addressed early.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

21/10/2026

Everyone knows about unfair preferences. Fewer appreciate that uncommercial transactions under s588FB are often the more powerful recovery tool.

An uncommercial transaction is one where a reasonable person in the company's circumstances would not have entered into it, having regard to the benefits and detriments to the parties involved.

Common examples:
→ Selling assets to a related party below market value
→ Guaranteeing debts of related entities for no consideration
→ Paying inflated management fees to associated entities
→ Forgiving debts owed to the company
→ Granting security for existing unsecured debts of related parties

Why it matters:
→ Recovery period extends to 4 years for related-party transactions (2 years for others)
→ No requirement to prove the recipient knew of insolvency (unlike preferences)
→ Catches transactions structured to look commercial but lacking substance

For directors and advisors: the "related party friendly" arrangements that made sense when the company was healthy look very different through the lens of s588FB. If a company is heading toward insolvency, every related-party transaction is a candidate for later scrutiny.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

19/10/2026

Here's a scenario we see more often than you'd think:

A director signs personal guarantees for the company's bank facility, commercial lease, and key supplier accounts in 2018. In 2021, they sell their shares, resign as director, and move on to something else. In 2025, the company (now run by someone else entirely) fails.

Six months into the liquidation, the former director gets a demand letter. The bank is calling on the 2018 guarantee. So is the landlord. The claim runs to hundreds of thousands.

**Their reaction: "That's not possible. I haven't been involved in the company for years."**

Unfortunately, it usually is possible.

Why personal guarantees survive:

→ A guarantee is a **contract between the guarantor and the creditor** — the company isn't a party
→ Resigning as a director does **nothing** to the guarantee
→ Selling shares does **nothing** to the guarantee
→ Notifying ASIC does **nothing** to the guarantee
→ The guarantee continues until the **creditor formally releases it in writing**

What makes it worse:

→ Most commercial guarantees are drafted as "**all monies**" or "**continuing**" guarantees — they secure whatever the company owes the creditor at any point, including debts incurred long after the guarantor exited
→ Variations to the underlying facility (higher limits, new terms) usually **don't** discharge the guarantor if the guarantee expressly permits variation without notice
→ The creditor has no obligation to tell the guarantor when new credit is extended
→ The guarantor often has no visibility into the company's financial position after leaving

What departing directors should do:

→ **List every guarantee** signed during your tenure — bank facilities, leases, trade accounts, equipment finance, insurance, utilities
→ **Request formal written release** from each creditor as part of your exit
→ Where the creditor won't release (common with banks and landlords), **negotiate a replacement guarantor** from the incoming ownership
→ Get an **indemnity** from the incoming owners covering any residual exposure — worthwhile even if not perfect protection
→ Set a **diary reminder** to review the position annually until you're satisfied the exposure is closed
→ **Keep copies** of every guarantee, every release request, and every response

For advisors handling a director exit or business sale: personal guarantee release is one of the top items that gets missed in the transaction paperwork. Structuring the exit properly at the time costs nothing. Cleaning up an unreleased guarantee five years later is often impossible.

If you're a former director who's just received a demand under an old guarantee — don't ignore it, and don't pay it without advice. There are defences worth checking (drafting issues, whether the debt is properly attributable, whether the creditor has done anything to discharge the guarantor), but the window to raise them is short.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

15/10/2026

Every VA, SBR, and liquidation involves formal reports to creditors. If you're a creditor (or advising one), how you read those reports determines what you actually know.

What to look for:

**Statement of Company's Business Property Affairs and Circumstances**
The director's own account of what happened. Read it carefully — it often reveals the director's framing of causes and responsibility, which may differ from what the investigation later shows.

**Practitioner's opinion on solvency**
When did the company first become insolvent? This drives potential insolvent trading and voidable transaction claims. The date matters.

**Related-party disclosures**
Who owns what, who lent what, and who was paid what. Related-party creditors, related-party transactions, and related-party votes should all be identified.

**Estimated return to creditors**
Both under the current course (VA/DOCA/SBR proposal) and under a hypothetical liquidation. The comparison is required — creditors are entitled to weigh one against the other.

**Preliminary investigations**
Voidable transactions identified, potential recovery actions, director conduct issues, offences that may need reporting to ASIC. These sections tell you what the practitioner is actively looking at.

**Independence declaration (DIRRI)**
Any prior relationships between the practitioner, the company, directors, or referrers. If something looks off, ask about it before the meeting.

For creditors and advisors:

→ Reports are dense, and the summary at the front rarely tells the full story
→ The most important information is often in the appendices and comparative tables
→ Missing information is itself information — if a category is silent, it's worth asking why
→ You have the right to ask questions before voting; use it

A well-prepared creditor is a difficult creditor to sideline. Read the reports properly, and you'll know when to push and when to accept.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

13/10/2026

Most people assume once a company is deregistered, it's gone. Not quite.

Under s601AH of the Corporations Act, a deregistered company can be **reinstated** by:

→ **ASIC**, on its own application, or
→ **A person aggrieved** by the deregistration (typically a creditor, former officer, or member), by application to the court

Reinstatement returns the company to existence as if it had never been deregistered. All prior rights, liabilities, contracts, and property vest back in the company.

Why creditors bring these applications:

→ **A claim was overlooked at the time of deregistration.** The creditor needs the entity to exist so they can pursue it
→ **Voidable transactions need to be recovered.** A liquidator can only act if the company is on foot
→ **Directors need to be pursued for personal liability.** DPN, insolvent trading, and related claims often require the company to be in liquidation
→ **Assets have been discovered.** Property that was missed in the original wind-up needs a company to be attached to
→ **Third parties have claims that require the company as a party.** Litigation, insurance claims, statutory claims

The process:

→ Application to the Federal Court or state Supreme Court
→ Evidence supporting the claim to reinstate (interest of the applicant, justification, proposed next steps)
→ Notification to ASIC and any other identifiable interested parties
→ Court order for reinstatement
→ In most cases, a liquidator is appointed at the same time to conduct the affairs of the reinstated entity

For directors of previously wound up or deregistered companies: your position isn't necessarily closed off just because ASIC records show the company as deregistered. If a creditor has proper grounds, the company can come back — and so can the questions about your conduct.

For creditors sitting on claims against a deregistered company: don't assume the claim is gone. If the amount justifies it, reinstatement is a real option.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

09/10/2026

A company is a defendant (or plaintiff) in active proceedings. It then enters administration or liquidation. What happens to the litigation?

The mechanics differ depending on the appointment:

**Voluntary Administration**
An automatic **stay** applies. Proceedings against the company are frozen unless the administrator consents or the court grants leave. The administrator has to assess whether to continue, settle, or discontinue the company's own proceedings.

**Liquidation**
A similar stay applies under s471B for court-ordered liquidations. For voluntary liquidations, the stay is narrower but the practical effect is often similar. The liquidator inherits the litigation and decides its future.

**SBR**
The moratorium under the SBR provisions provides limited protection — proceedings can still be commenced or continued in some circumstances, and legal advice on the specific application is essential.

What the practitioner considers:

→ **Merits of the case** — is the company likely to win, lose, or somewhere in between?
→ **Cost vs recovery** — even winning claims cost money to run
→ **Litigation funding** — third-party funders may be interested in strong claims
→ **Set-off with counterclaims** — a strong claim can be offset against a defendant's own claim
→ **Insurance coverage** — D&O or general policies may respond
→ **Statutory priorities** — legal costs from continued litigation are typically administration expenses (priority)

For lawyers acting for or against companies in this position:

→ The stay is real — filing a next step without leave is procedurally void
→ Communication with the practitioner is essential, and comes first
→ Assumed positions from before the appointment (like "they'll settle before trial") may no longer hold — the practitioner has a different calculus

For directors: if you're in active litigation and considering an appointment, factor the litigation into the timing. The wrong appointment at the wrong time can convert a winnable case into a lost one.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

07/10/2026

At a creditors' meeting, the vote determines the outcome. In many cases, the largest creditor by value is a related party — the director's family trust, a group company, or a shareholder who's lent money in.

Australian insolvency law recognises the obvious risk: if related parties can vote their claims freely, they can determine the outcome regardless of what independent creditors want.

The safeguards:

→ **Related-party claims** must be disclosed in the practitioner's reports
→ **The chairperson at a creditors' meeting** has a casting vote and specific powers to discount or set aside related-party votes where necessary
→ **In an SBR context**, related-party creditors are specifically **excluded** from voting on the restructuring plan
→ **ASIC and the ATO** actively scrutinise resolutions where the outcome was determined by a related-party vote
→ **Voidable transaction provisions** apply retrospectively where a related party benefited from the outcome

Why the ATO is particularly attentive:

The ATO is often the largest independent creditor. In cases where a related party vote pushes through an outcome the ATO didn't support (a compromise, a specific liquidator appointment, or an unfavourable DOCA), the ATO has escalating options — from opposing the resolution at the meeting, to challenging it in court, to bringing separate recovery action later.

For advisors preparing a client for an insolvency process: if the numbers rely on related-party votes carrying the day, the plan is fragile. The independent creditor position needs to be the anchor, not the residual.

Learn more at www.menziesadvisory.com.au or you can call us on 1300 948 593.

Address

Services Available In:
Southport, QLD
4212

Opening Hours

Monday	8:30am - 5pm
Tuesday	8:30am - 5pm
Wednesday	8:30am - 5pm
Thursday	8:30am - 5pm
Friday	8:30am - 5pm

Website

http://www.menziesadvisory.com.au/

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