Within five business days after the restructuring begins (or longer if approved by the restructuring practitioner), directors must provide the restructuring practitioner with a signed declaration stating that:
- The company is eligible.
- Whether the company has entered into a voidable transaction.
- The directors believe on reasonable grounds that the company meets the eligibility criteria, and why.
Transactions outside the ordinary course of business, such as material asset transfers and forgiving related party debts, are the sorts of transactions that might be voidable in a liquidation. If in doubt, directors may require appropriate advice before making the declaration.