Deeds of Company Arrangement

A Deed of Company Arrangement (“DOCA”) is a binding agreement between the company, creditors (generally excludes secured creditors), and the Deed Administrator. A DOCA governs how the company’s debts are compromised and/or paid over an extended period. 

A DOCA is flexible in that it may provide for:

  • a moratorium on creditor claims; and
  • a compromise of debts.

A DOCA differs from other insolvency appointments as it does not necessarily bring the company’s existence to an end. A DOCA may provide for control of the affairs of the company to revert to the directors and result in a better return to creditors than liquidation.

Often the advantage to a company of a DOCA is that once it has dealt in an orderly way with creditor claims, the company can survive its financial difficulties and continue to trade, generally with its usual customers.