It's the deal that lets a company walk out of voluntary administration alive: creditors agree to accept less than they're owed, and the business gets to keep trading. Here's how it actually works — and the catch that decides whether it saves the company or just delays the funeral.
A Deed of Company Arrangement — "DOCA", pronounced "docker", which is why you'll hear it both ways — is a binding deal between a company and its creditors, struck during voluntary administration. The company's debts get compromised: creditors agree to accept less than the full amount, and in return the company survives.
Think of it as the alternative to liquidation. Instead of selling everything and shutting the doors, the company says to its creditors: "Here's what we can genuinely pay — as a lump sum, or over time. It's more than you'd get if we folded. Take it, and we live to keep trading."
Your non-lockdown DPN is dealt with by the appointment itself — that's the urgent part handled. Your personal guarantees survive. A DOCA binds the company and its creditors; it doesn't release guarantees you've signed personally, and it doesn't touch a lockdown DPN. Anyone telling you otherwise is selling something.
Your credit file and supplier relationships take a hit, and the ATO watches companies that come out of a DOCA closely. The fresh start is real — it comes with a shorter leash.
"A DOCA buys the company a second life. What it can't buy is a different outcome — that's decided by what the directors do with the second life."
Here's what years of this work teaches you: a DOCA fixes the balance sheet, not the business. The debts that get compromised weren't bad luck — they built up because of how the company was being run. The pricing that didn't cover overheads. The tax money quietly used as working capital. The decisions that never got made.
Hand the company back with a clean balance sheet and the same habits, and you've got a business on a longer fuse to the same explosion — and the second time, creditors and the ATO are far less patient. We've watched it happen too many times to be polite about it: it's painting a sinking ship.
A DOCA done properly is a powerful tool — one half of a turnaround, not the whole thing. The other half is rebuilding how the business runs and how it's led, so the restructured company doesn't sail straight back onto the rocks. That's the work we stay for.
What a DPN means, the difference between lockdown and non-lockdown, and your options inside the window.
The lighter alternative to administration — when it works, and when it's the wrong tool.
Why clearing the debt is only half the turnaround — from someone who's sat in the director's chair.
Whether a DOCA is the right call depends on your real numbers — and whether the business underneath them is worth saving. One confidential conversation and you'll know where you stand, including when the honest answer is liquidation.
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