The unique advantage of Barrett Walker lies in our multidisciplinary approach. With a combined legal, accounting, and consulting practice, our insolvency practitioners know about corporate insolvency, 'safe harbour", and restructuring - be it for secured, employees, unsecured creditors, directors, or investors.
What is a standstill agreement and why use one?
This form of agreement (usually as a deed) between a company and one or more of its creditors (but negotiated separately) records the terms on which the parties have agreed to “park to one side” their rights under their existing legal relationships.
For companies in financial stress and on the cusp of default or even in default of a finance or supply agreement, the standstill agreement will allow the management of the debtor company to focus on running the business for a period of time in an attempt to return the business to normal trading conditions including bringing creditor payments into agreed terms.
The benefit to the parties is that the ongoing relationship is preserved, there is a prospect that the debtor company may trade through its difficulties and the business remains intact and the suppliers and financiers have a profitable and paying client rather than a bad debt.
Often it is necessary for the debtor company to convince the counterparty that the financial position is salvageable and that the “standstill” is for the benefit of both parties. Barrett Walker can assist in preparing the necessary financial statements, cash flows, and “on liquidation” scenario to demonstrate why is it that the creditors may be in a better position by accepting a standstill agreement than a formal insolvency appointment.
Any such standstill agreement needs to be reduced to writing and documented by suitably qualified lawyers which may be the debtor company’s existing lawyers or alternatively, our associated legal practice Barrett Walker Lawyers can assist in documenting the standstill agreement.
We offer complimentary, obligation free 30-minute consultation to assist you in exploring your best options and develop a plan to rescue your business.