Liquidations handled by Worrells often involve around 20 unsecured creditors.
So, what happens when a file lands with 13,000?
The questions come thick and fast:
How do we even communicate with that many people?
How many creditors can we realistically process and pay at once?
How do we do all of this without eroding the very pool we are trying to distribute?
This is a story about size, scale, and the need to rethink the traditional approach.
Background
In 2022, Worrells was appointed liquidator of a Registered Training Organisation.
Following our appointment, we realised the company’s assets, pursued available recoveries, and ended up with a distribution pool of approximately $1.3 million.
Ordinarily, this is where the process becomes routine: call for proofs of debt, adjudicate claims, and distribute dividends.
But with 13,000 potential creditors, predominantly former students from a wide range of socioeconomic and cultural backgrounds, nothing about this process was going to be routine.
Lesson 1: Scale changes everything
It quickly became clear that simply communicating with creditors would be a significant challenge.
As Mark Zuckerberg once said:
“Almost every problem we face now is a problem of scale.”
That principle applied immediately.
Worrells operates its own internal system, Worrells Workbench, designed to manage insolvency workflows efficiently. However, every system has its limits, and a creditor list of this size tested those limits.
From the outset, our internal IT team had to:
Redesign how large creditor datasets were handled to avoid system instability.
Reconfigure email functionality to send communications in controlled batches.
Ensure data integrity across thousands of creditor records.
During the course of the liquidation, we received over 5,000 claims from creditors.
That was only the beginning.
Lesson 2: Rethinking claim adjudication
A liquidator has a quasi-judicial role in adjudicating proofs of debt. Traditionally, this involves reviewing each claim individually.
At this scale, that approach was not economically viable.
We calculated that, if each claim were assessed in the normal course, the cost of adjudication would exceed the funds available for distribution to creditors.
Around this time, the decision in Morgan, in the matter of Traditional Values Management Ltd (in liq) [2024] FCA 74 provided some timely guidance. In that case, the Court accepted a departure from the traditional proof of debt process where strict adherence would deplete the distribution pool and reduce returns to creditors.
Guided by that reasoning, and following legal advice, we adopted a more commercial and data-driven approach.
A different approach
Instead of assessing each proof of debt received individually, we cross-referenced creditor information across multiple datasets, including internal creditor records, student enrolment records, bank statements, refund transaction data, and records of offers made by the new business owner to allow former students to complete their studies and mitigate their losses.
This approach enabled creditor claims to be assessed consistently and efficiently, ensuring legitimate claims were admitted for dividend purposes while duplicate, refunded, or otherwise invalid claims were rejected. This was particularly important in circumstances where a traditional claim adjudication process would have been impractical and uneconomical. The resulting data was structured in a format that facilitated targeted communications with creditors and streamlined the adjudication notification and dividend payment process.
Turning complexity into structure
After adjudicating claims, another question remained:
How do you communicate thousands of individualised outcomes in a cost-effective way?
We identified six primary creditor categories, each requiring individually addressed notices under subregulation 5.6.54(1) of the Corporations Regulations 2001 (Cth), including different calculations and explanations.
To address this, Worrells developed a bulk communication system capable of:
Merging tailored data into correspondence at scale
Generating compliant, individualised notices
Distributing communications efficiently and accurately
The result was significant.
Had we followed the traditional approach, no dividend would have been paid.
By adopting a streamlined approach, we were eventually able to return approximately $550,000 to creditors.
Completing the process
After claims had been adjudicated and notices issued, we were mindful of the practical challenges of paying the dividend.
Rather than issuing all payments at once, dividends were paid in multiple batches as creditors provided their banking details. This approach ensured ABA files did not exceed limits while allowing distributions to be made without waiting for every creditor to respond.
Given the size of the creditor pool, a significant number of creditors provided incorrect, incomplete, or outdated banking information.
Where creditors could not be contacted or did not respond, their entitlements were ultimately remitted to the ASIC Unclaimed Money Fund six months after the dividend was paid, in accordance with section 544 of the Corporations Act 2001 (Cth).
Lesson 3: Communication is critical
At this scale, communication is not just important; it is essential.
Internally
We ensured our team was prepared before any major communications were issued:
Administration staff were briefed on all outgoing correspondence.
Detailed FAQs were developed to guide responses.
Teams were equipped to manage a high volume of enquiries.
Externally
With a diverse creditor base, tone and clarity mattered.
We moved beyond standard template documents and focused on communicating in line with Worrells' early mantra of "Plain Talk, Straight Answers, Fast Results" by using:
Clear, plain-language explanations
Targeted messaging for different creditor groups.
Structured content to reduce confusion and follow-up queries.
The objective was simple: make the complex process easy for everyone to understand.
A final thought
This engagement reinforced a simple truth: insolvency is not just about following a process; it is about adapting that process to the circumstances.
When scale challenges convention, outcomes depend on the willingness to:
Rethink established practices
Invest in systems and innovation
Focus on delivering practical results for creditors
At Worrells, we back our people, systems, and technology to meet those challenges. Whether a matter involves 20 creditors or 13,000, the objective remains the same: maximise returns, act commercially, and deliver practical outcomes for creditors.
Have some questions?
Ask the author - Broderick Dipple, Senior Manager at Worrells North Lakes.