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Chamberlains SBR specialises in business reconstruction and insolvency. Our firm works to complement and enhance the service being provided to clients by accountants and solicitors. We provide a full insolvency service, performing both corporate and bankruptcy administrations

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Our practice has been successfully built up on a policy of saving and salvaging financial problems rather than dismantling the insolvent. If there is no other alternative, we will be honest in saying so. We pride ourselves as being country practices who have made the commitment to regional areas.

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Chamberlains SBR works solely in insolvency accounting and do not offer any other accounting services. Accountants can refer insolvency matters safe in the knowledge that we do not do taxation or general accounting work, and there is no prospect of the client changing to our firm. We welcome enquiries from Accountants and Solicitors to discuss a client's financial problems.

Creditors info - Creditor Information on Remuneration

If company is in financial difficulty, it can be put under the control of an independent insolvency administrator. Such a person is called a ‘liquidator’ or a ‘voluntary administrator’ or an ‘administrator of a deed of company arrangement’ depending on the type of administration involved. For the purposes of this guide, we use the collective word ‘administrator’.

This information sheet gives general information for creditors on the approval of an administrator’s fees in a liquidation, a voluntary administration or a deed of company arrangement (other forms of insolvency administration are beyond the scope of this information sheet). It outlines the rights that creditors have in the approval process.

Download How to Complete a Form 532


Work undertaken by administrators

The work undertaken by administrators depends on the type of administration concerned and the issues that need to be resolved. Some issues are straightforward, while others are more complex. However, what is common amongst all administration types is that an administrator is, by law, required to undertake a number of tasks which may not directly benefit creditors (for example, the preparation of reports to the Australian Securities and Investments Commission or the preparation of six monthly receipts and payments). An administrator is still entitled to remuneration for undertaking these statutory tasks.

For more information on the tasks involved ind different administrations, see ASIC’s information sheets: ‘Liquidation: a guide for creditors’ and ‘Voluntary administration: a guide for creditors’.

Entitlement to fees and costs

An administrator is entitled:

  • to be paid reasonable fees, or remuneration, for the work they perform, once these fees to be reimbursed for out-of-pocket costs incurred in performing their role
  • legal fees
  • valuer’s, real estate agent’s and auctioneer’s fees
  • stationery, photocopying, telephone and postage costs
  • trading costs involved in running the company’s business during the administration (e.g. for the purchase of stock)
  • retrieval costs for recovering the company’s computer records, and storage costs for the Company’s books and record

Creditors have a direct interest in the level of fees and costs, as the administrator will, generally, be paid from the company’s available assets before any payments to creditors are made. If there are not enough assets, the administrator may arrange for a third party, for example another creditor, to pay any shortfall. As a creditor, you should receive details of such arrangements.

If there are not enough assets to pay the fees and costs, and there is no third party payment arrangement, any shortfall is not paid and the administrator is in effect ‘out of pocket’.

Calculation of fees

Fees of an administrator may be calculated using one of a number of different methods, such as:

  • on the basis of time spent by the administrator and their staff, according to hourly rates,
  • a quoted fixed fee, based on an estimate of the costs, or
  • a percentage, usually of asset realisations.

Charging on the basis of time spent is the most common method. Administrators have a scale of hourly rates, with different rates for each category of staff working on the administration, including the administrator. If the administrator intends to charge on a time basis, you should receive a copy of these hourly rates before the administrator requests approval of their fees.

The administrator and their staff will record the time taken for the various tasks involved, and a record will be kept of the nature of the work performed. It is important to realise that administrators are professionals who are required to have accounting qualifications and maintain up-to-date knowledge of accounting, business and legal issues. They have serious responsibilities under the law. Their hourly rates and those of their qualified staff reflect this.

The hourly rates do not represent an hourly wage for the administrator and their staff. The administrator is running a business—an insolvency practice—and the hourly rates will be based on the cost of running the business, including overheads such as rent for business premises, utilities, wages and superannuation for staff who are not charged out at an hourly rate (such as personal assistants), information technology support, office equipment and supplies, insurances, and taxes with allowance then made for profit.

Many of the costs of running an insolvency practice are fixed costs that must be paid, even if there are insufficient assets available to pay the administrator for their services. These are all matters that committee members or creditors should be aware of when considering the fees presented. However, regardless of these matters, creditors have a right to question the administrator about the fees and whether the rates are negotiable.

It is up to the administrator to justify why the method chosen for calculating fees is an appropriate method for the particular administration. As a creditor, you also have a right to question the administrator about the calculation method used and how the calculation was made.

Report on proposed fees

In order to seek approval of fees, the administrator must hold a meeting of the members of any committee of creditors, or, if there is no committee, the creditors themselves. A report must be sent, with the notice of meeting, setting out:

  • Information that will enable the committee members/creditors to make an informed assessment of whether the proposed fees are reasonable
  • a summary description of the major tasks performed, or to be performed, and
  • The costs associated with each of these tasks

The report should also provide a summary of out-of-pocket costs incurred or expected to be incurred.

Committee members/creditors may be asked to approve fees for work already performed or fees based on an estimate of work yet to be carried out. If the work is yet to be carried out, it is advisable for creditors to set a maximum limit (‘cap’) on the amount that the administrator may receive. For example, ‘future fees are approved calculated on hours worked at the rates charged (as set out in the provided rate scale) up to a cap of $X’. If the work involved then exceeds this figure, the administrator will have to ask the creditors’ committee/creditors to approve a further amount of fees, after accounting for the fees already incurred.

Who may approve fees

Who may approve fees depends on the type of external administration: see Table 1. The administrator must provide sufficient information to enable the creditors’ committee, the creditors or the court to make an informed assessment as to whether the fees are reasonable.

Creditors Commmittee



Administrator in a Voluntary Administration







Administrator of a deed of company arrangement







Creditors Voluntary Liquidation







Court-appointed Liquidator







  1. If there is one.
  2. If there is no creditors’ committee or the committee fails to approve the fees.
  3. If there is no approval by creditors.
  4. If there is no creditors’ committee.
  5. Unless an application is made for a fee review.
  6. If insufficient creditors turn up to the meeting called by the liquidator to approve fees, the liquidator is entitled to be paid up to a maximum of $5,000, or more if specified in the Corporations Regulations 2001.


Creditors’ committee approval

If there is a creditors’ committee, members are chosen by a vote of creditors as a whole. In approving the fees, it is important that the members realise that they represent all the creditors, not just their own individual interests. A creditors’ committee will generally only be set up where there are a large number of creditors. If there is one, then they will ask the committee to approve their fees. A creditors’ committee makes its decision by a majority in number of its members present in person at a meeting, but it can only act if a majority of its members attend.

If you would like to know more about creditors’ committees and how they are formed, see ASIC’s information sheets: ‘Liquidation: a guide for creditors’, ‘Voluntary administration: a guide for creditors’ and ‘Insolvency: a glossary of terms’.

Creditors’ approval

Creditors approve fees by passing a resolution at a creditors’ meeting. The vote requires a simple majority of creditors present and voting, in person or by proxy, indicating that they agree to the resolution. Unlike committee members, creditors may vote according to their individual interests. If a ‘poll’ is taken at the meeting (that is, rather than a vote being decided on the voices or by a show of hands, a count of each vote and its value is taken), a majority in number and value of creditors present and voting must agree. A poll requires the votes of each creditor to be recorded.

A proxy is a document whereby a creditor appoints someone else to represent them at a creditors’ meeting and to vote on their behalf. A proxy can be either a general proxy or a special proxy. A general proxy allows the person holding the proxy to vote how they want on a resolution, while a special proxy directs the proxy holder to vote in a particular way.

A creditor will sometimes appoint the administrator as a proxy to vote on the creditor’s behalf. An administrator, their partners or staff must not use a general proxy to vote on approval of their fees; they must hold a special proxy in order to do this. They must vote all special proxies as directed, even those against approval of their fees.

Deciding if fees are reasonable

If you are asked to approve an amount of fees either as a committee member or by resolution at a creditors’ meeting, your task is to decide if that amount of fees is reasonable, given the work carried out in the administration and the results of that work. The ARITA’s Code of Professional Practice: Remuneration outlines the steps administrators should take to make sure they fulfill their responsibilities to creditors when asking creditors to approve fees, including when those creditors are acting in their capacity as committee members. This guide is available on the ARITA website at

If you need more information about fees than is provided in the administrator’s report, you should let them know before the meeting at which fees will be voted on.

What can you do if you think the fees are not reasonable?

If you do not think the fees being claimed are reasonable, you should raise your concerns with the administrator. It is your decision whether to vote in favour of, or against, a resolution to approve fees. Generally, if fees are approved by a creditors’ committee/creditors and you wish to challenge this decision, you may apply to the court and ask the court to review the fees. Special rules apply to court liquidations. You may wish to seek your own legal advice if you are considering applying for a court review of the fees.

Reimbursement of out of pocket costs

An administrator should be very careful incurring costs that must be paid from the administration—as careful as if they were incurring the expenses on their own behalf. Their report on fees sent to creditors should also include information on the out-of-pocket costs of the administration. If you have questions about any of these costs, you should ask the administrator and, if necessary, bring it up at a creditors’ committee/creditors’ meeting. If you are still concerned, you have the right to ask the court to review the costs.

Queries and complaints

You should first raise any queries or complaints with the administrator. If this fails to resolve your concerns, including any concerns about their conduct, you can lodge a complaint with the ARITA at or write to:

Complaints Manager


GPO Box 3921



You can also contact ASIC at, or write to:

Manager National Assessment & Action


GPO Box 9827


Complaints against companies and their officers can also be made to ASIC. For other enquiries, email ASIC through, or call ASIC’s Infoline on 1300 300 630 for the cost of a local call.


Important note: This information sheet contains a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances.



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