NSW Parent Company in Voluntary Administration

[sanami]

Hi All,

Our parent company has gone into Voluntary Administration. As the CEO of a subsidiary, who do I now report to?

Is it to the board of directors of our parent company? Or directly to the appointed administrators? I have not received communication regarding this from either group.

What other responsibilities do I hold as the CEO of a subsidiary whose parent company in in VA?

 

[Rob Legat - SBPL]

First, check to make sure your company is still solvent (which should always be a primary concern anyway).
Second, find out who the administrator is and get in contact with them, and explain your position. They will either be aware of you already, or will in short order. You're still answerable to the 'shareholders' in terms of it being the holding company - it's just that that company is now being run by the administrator.

It's difficult to say what you should do in terms of running the subsidiary without a thorough understanding of the structure, and how removed you are from the financial ties of the holding company. Until the administrator can report to the creditors and a determination is made about the future of the holding company, you should be very careful about taking on further responsibilities/liabilities. Don't make any decisions until you can speak to the administrator - which should happen right now. If the administrator is not clear in what is going to happen, seek advice from an insolvency practitioner.

 

[Tim W]

I am assuming in this post that the company that employs you ("your employer")
is not a franchisee or a licencee, and that you are a proper PAYG employee,
and not in some sort of sham contracting arrangement.

1. Is it correct that your "parent company" is actually a company (ie a corporation)?
   I as so as to distinguish it from a partnership or a trust.
   
   
2. If the answer to the above is "yes", then the "parent company" is probably the main (or only)
   shareholder in the company that actually employs you.
   As such, as an employed CEO, if your employer is not in VA, then you continue to report to your employer's director(s).
   What you sometimes see is that the directors of parent and subsidiary companies are the same people.
   This can be very confusing, especially when the directors try to carry on as though nothing has happened.
   
   
3. I agree with @Rob Legat - SBPL - your first duty is to make sure that your employer is, and will remain, solvent.
   Take steps to ensure that your parent company does not plunder your employer's bank accounts, or assets, or stock, or accounts receivable,
   in an effort to raise cash. Be especially careful that they do not steal from the fund of your employees' entitlements.