Barrett Walker offers Insolvency and Corporate Restructuring Services - helping businesses to navigate this complex area of commercial law and practice.
In a dynamic economic climate, corporate restructuring allows businesses to reorganise their operations, in order to ease financial difficulties and ultimately overcome financial challenges. Corporate restructuring can occur in a number of ways, including but not limited to, cost reduction, a relentless focus on liquidity, refinancing, budgeting, business planning, standstill agreements, creditor compromises, sale of surplus assets, fresh equity, and/ or sale of parts of the business. Barrett Walker has a wealth of experience in all aspects of corporate restructuring, with a team of multidisciplinary professionals to administer all aspects of the process.
We offer a number of services in the area of corporate restructuring, including:
At Barrett Walker, a review involves listening to you and obtaining an understanding of your corporate history and objectives, an analysis of financial history, cash flow needs, setting priorities, and identifying stakeholder priorities, in order to understand your situation. Workouts involve a relentless focus on costs and liquidity which as a consequence may result in new arrangements with stakeholders including creditors.
A standstill agreement is an agreement or series of agreements between a company and its major creditors where a creditor agrees not to take enforcement steps but rather quarantine existing debt for a limited period to enable the company to get back to profitability and in turn, become cash flow positive. Often this will involve the creditors continuing to supply the company – perhaps on a number 2 account that may have restricted trading terms.
Deeds of Compromise
This mechanism is a private arrangement between a company and some or all of its creditors by way of a deed where the creditors’ claims are compromised at less than 100 cents in the $. The benefit to the company is that it can reduce its overall debt load in the hope of becoming profitable and cash flow positive and for creditors, it may provide a certain sum of money from a third-party source that would not otherwise be available. Where there has been a long and profitable commercial arrangement between the parties this approach can re-enliven that relationship for a profitable trading relationship into the future.
A ‘safe harbour’ is another corporate restructuring strategy that Barrett Walker uses, which entails company directors detailing a plan to steer the company away from liquidation. It may protect directors from insolvent trading claims. This form of restructuring is supported by company law legislation.
Small Business Restructuring
From 1 January 2021 SMEs in financial difficulty will be able to seek protection from creditors using the Small Business Restructuring process recently introduced into Australia’s insolvency laws. These laws are a break from the usual “creditor in possession” model that has been the hallmark of Australian insolvency law to a “debtor in possession” model which is akin to the US style of restructuring near insolvent or insolvent companies.
In short, the directors appoint a Small Business Restructuring Practitioner (SBRP), prepare a restructuring plan which is certified by the SBRP, and then that plan is put to creditors. If approved by creditors the company implements the plan. The SBRP then deals with the claims of creditors and pays out any dividend.
The new regime hopes to assist SME’s emerge from the financial consequences of COVID-19.
Voluntary Administrations (VA)
Barrett Walker offers VAs which gives an insolvent or near insolvent company the opportunity to be independently assessed and to negotiate a plan acceptable to creditors in the hopes of achieving a future for the business.
Deeds of Company Arrangements
A deed of company agreement is the outcome of a successful VA which avoids the often time consuming and the end of the game process of a formal liquidation.
A number of factors can result in businesses not being able to continue to function. Dealing with these circumstances in the most efficient and effective manner possible is imperative. Our insolvency practitioners here at Barrett Walker specialise in identifying the options available to you and your business.
Corporate Insolvency Services
At Barrett Walker, we provide two main types of corporate insolvency services, including:
Creditors’ Voluntary Liquidations
Our Ray Barrett, is a registered liquidator frequently acting as a court-appointed liquidator. The purpose of such appointments is to get in the assets of the company, investigate the reasons for the company’s failure, the actions of its director(s) and any related parties, consider legal action to recover assets for the benefit of creditors, report any wrongdoing to ASIC and if there are surplus funds then pay a dividend to creditors according to the legislative hierarchy of payments. In essence, though, liquidation is about the adjudication of the rights of those that have had dealings with the company.
Creditors Voluntary Liquidations
At Barrett Walker, our Melbourne liquidator assists directors facilitate creditors’ voluntary liquidations. This is a voluntary process commenced by the company’s directors and sanctioned by the company’s members. The purpose of such appointments is to get in the assets of the company, investigate the reasons for the company’s failure, the actions of its director(s) and any related parties, consider legal action to recover assets for the benefit of creditors, report any wrongdoing to ASIC and if there are surplus funds pay a dividend to creditors according to the legislative hierarchy of payments. In essence, though, liquidation is about the adjudication of the rights of those that have had dealings with the company.
Why you should choose Barrett Walker
Here at Barrett Walker, we pride ourselves on being an independent advisor in insolvency matters. Our team will tell you like it is and what you can expect from the different options available to you. If you would like to find out more about the services we offer, we are happy to answer queries over the phone or through our website’s contact page: https://www.barrettwalker.com.au/contact.
Barrett Walker Certified Practising Accountants Pty Ltd is a CPA Practice