Frequently Asked Questions regarding the Voluntary Administration for Suppliers

The phone call no subbie wants to get came through to Dave's ute at 7.42am on a Tuesday. He was halfway through a coffee at the servo on the Bruce Highway, on his way to a commercial fit-out in Townsville, when his accountant rang. The builder he'd been invoicing for the past nine months — the one sitting on $48,000 of unpaid progress claims — had just appointed voluntary administrators. Dave's first reaction was a word we can't print. His second was the question every tradie, supplier and subcontractor in Queensland asks when this happens: am I going to see a cent of that money?

Voluntary administration (VA) is one of those legal processes most of us never think about until it lands on our doorstep. Then suddenly we're getting circulars in the mail from an insolvency firm we've never heard of, being told about "creditors' meetings", and trying to work out whether to keep supplying the company, walk away, or start chasing the directors personally. This guide answers the questions we get asked most often by Queensland trade suppliers, labour-hire operators and subbies when a customer hits the wall.

What actually is voluntary administration?

Voluntary administration is a formal insolvency process under Part 5.3A of the Corporations Act 2001. The directors of a struggling company appoint an independent registered liquidator — the "administrator" — to take control of the business while everyone works out whether the company can be saved, restructured, or wound up. It's not the same as liquidation. Think of it as a time-out: a short, intense period (usually 20 to 25 business days, though courts can extend) where trading is paused or restricted while the administrator investigates the books and reports back to creditors.

At the end of that period there's a second creditors' meeting where you, along with every other unsecured creditor, vote on one of three outcomes: hand the company back to the directors (rare), accept a Deed of Company Arrangement (DOCA) where creditors get paid a percentage over time, or move the company straight into liquidation. Until that vote happens, you're in limbo — and the goalposts move daily.

I'm owed money. Where do I sit in the queue?

This is the brutal bit. Trade creditors — that's most suppliers, subbies and labour-hire firms — are unsecured creditors. That means you sit behind the administrator's own fees, the secured creditors (usually the bank that holds a charge over the company's assets), and employee entitlements like unpaid wages, super and leave. By the time the pot gets to unsecured creditors, there's often very little left, and what is left gets divided pro-rata.

The Australian Securities and Investments Commission publishes plain-English fact sheets on creditor rights — worth a read before the first meeting. Have a look at the ASIC guidance for creditors so you walk in knowing the rules of the game rather than relying on what someone tells you in the carpark afterwards.

Realistic expectation: in straight liquidation, unsecured trade creditors in the construction sector typically recover somewhere between zero and ten cents in the dollar. Under a well-structured DOCA, you might do better — sometimes 20 to 40 cents — but you'll wait 12 to 24 months for it. Anyone promising you full recovery is either lying or hasn't read the report yet.

Do I keep supplying them during the administration?

Short answer: only if you want to, and only on terms you're comfortable with. Once administrators are appointed, any goods or services you supply after the appointment date are treated differently from your pre-appointment debt. The administrator is personally liable for new debts they incur (within limits), which means if you keep supplying with a clear PO from the administrator, you're far more likely to get paid for that new work — often within 30 days, sometimes COD.

But — and it's a big but — your old debt doesn't get magically caught up. That sits in the unsecured pile. Plenty of suppliers make the mistake of keeping the tap open hoping it'll all wash out in the end, and end up doubling their exposure. The smart move is: cash on delivery for new supply, no extension of credit, and get every new instruction in writing from the administrator (not the old directors, who no longer have authority).

What about retention of title (ROT) on materials I've delivered?

If your terms of trade have a properly drafted retention of title clause and you've registered your interest on the Personal Property Securities Register (PPSR), you may be able to recover unsold or unfixed stock you delivered before the administration. This is one of the biggest "wish I'd known" lessons trade suppliers learn the hard way. A $20 PPSR registration when you onboarded the customer can be the difference between recovering your steel, fittings or consumables and watching them roll out the gate as part of the administrator's asset sale.

If you haven't registered, the goods are treated as the company's property the moment they were delivered. Game over. If you're a supplier reading this and you've never heard of the PPSR, stop what you're doing today and talk to your accountant or a commercial lawyer about getting your terms of trade and PPSR registrations sorted across your whole customer book.

I'm a subbie and I've got tools and gear on site. Can I just go and grab them?

Tempting, isn't it. The answer is no — not without permission from the administrator. Walking onto a site and removing plant, gear or unfixed materials after the appointment date can land you with a trespass claim or worse, accusations of asset stripping. Even if it's clearly yours.

What you do is write to the administrator immediately, list the assets (with serial numbers, photos and proof of ownership — invoices, finance docs, asset register), and request access to recover them. Most administrators will work with you reasonably; they don't want your gear, they want the company's. But it has to go through them. If you're running a labour-hire crew and you've got blokes still turning up to site, pull them off until you've got written confirmation from the administrator that they're authorised to be there and that wages will be covered.

That last point matters. If your workers are owed wages for work done before appointment, those wages are the failing company's debt to you (or, if directly employed by them, to the workers as priority creditors). If you're scrambling to redeploy crew onto other jobs, our day-rate and labour hire board is one place to keep them earning while the dust settles. Nothing kills a labour-hire business faster than carrying idle workers through a six-week creditor process.

What about my employees and apprentices?

If your business is the supplier (not the company in administration), your employees are unaffected directly — your obligations to them under their awards and the Fair Work Ombudsman rules continue as normal. The risk is indirect: if losing this customer puts your own cash flow in danger, you need to act fast on cost control, not on people. Talk to your accountant about ATO payment plans, bank covenants and trade credit insurance before you start cutting heads.

If you have apprentices who were placed at the failed company's site, ring your Australian Apprenticeship Support Network (AASN) provider that day. They'll help you redeploy the apprentice to another host or transfer the training contract. Apprentices are protected under the training contract system in Queensland, but only if someone advocates for them quickly. The longer they sit at home unpaid, the more likely they walk away from the trade altogether — and Queensland can't afford to lose them. Plenty of host employers are actively recruiting through apprenticeships in Queensland if you need to find a new placement at short notice.

The creditors' meeting — do I have to go, and what should I do?

You don't have to attend in person, but you should absolutely lodge a proof of debt and a proxy form. The first meeting (within eight business days of appointment) is mostly procedural: confirming the administrator and forming a committee of inspection. The second meeting is the big one — that's where you vote on the company's future.

Before that second meeting, the administrator must send you a report on the company's affairs with their recommendation. Read it. Properly. If a DOCA is on the table, look at the projected return to unsecured creditors and the timeframe, and compare it to what you'd realistically get in straight liquidation. Sometimes a DOCA is genuinely better; sometimes it's a tarted-up way of letting the directors keep the business while creditors take a haircut. The job of the committee of inspection is to ask the hard questions — if you can spare a representative, get on it.

How do I avoid being in this position next time?

Every supplier who's been burned once becomes religious about credit control. The basics:

• Run a credit check on every new commercial customer before extending terms. It costs $30 and tells you whether they've got prior defaults, court actions or director banning history.
• Watch your aged debtors weekly, not monthly. The shift from "pays in 45 days" to "pays in 75 days" is the warning sign that something's about to break.
• Use the security of payment regime. Queensland's Building Industry Fairness (Security of Payment) Act gives you fast-track adjudication rights and, for head contracts above the threshold, project trust accounts. The QBCC has practical guidance on how to lodge a payment claim and escalate if you're being strung along.
• Register on the PPSR for every supply-on-credit relationship.
• Don't concentrate your book. If one customer is more than 25% of your monthly revenue, you've got concentration risk, and you need a plan to dilute it.

If concentration risk is your problem, the practical fix is to diversify the jobs your team is on. Plenty of QLD businesses are picking up steady work in resources, where contractor payment cycles tend to be tighter and counterparties are well-capitalised — have a look at the current mining and FIFO roles if you've got a crew you can mobilise.

The bottom line for Queensland trade suppliers

Voluntary administration isn't the end of the world, but it isn't a fair fight either. Trade creditors almost always come off second-best, and the businesses that survive it are the ones who acted fast, kept good records, and didn't throw good money after bad. If you're staring down a customer who's just appointed administrators, your immediate priorities are: stop the bleeding (no more credit), protect your assets (PPSR, ROT, written recovery requests), get advice (a registered insolvency lawyer for an hour is the best $400 you'll spend), and look after your crew. Dave from the start of this article? He stopped supply that morning, recovered $11,000 worth of unfixed materials under his ROT clause, redeployed his two leading hands onto a Queensland Rail job within a week, and accepted a DOCA dividend of 18 cents in the dollar fourteen months later. Not a win — but not the wipe-out it could have been.

Keep your books tight, your terms airtight, and your network wider than one big customer. That's how you survive in trade.