Client Overview

The Client operated a business within the construction industry which employed c.50 staff. The business was distressed due to a series of adverse weather events and inflationary costs passed on by suppliers. The business owed unsecured creditors $700k+ with limited ability to enable the repayment of creditors in the short term which increased the risk of failing to meet licencing requirements to enable ongoing trading. The director had received a Director Penalty Notice from the Australian Taxation Office for the outstanding business-related debts.

​Engagement Scope​

We were retained as Restructuring Practitioner for the client to assess the financial position of the entity and assist with the preparation of the Restructuring Plan.​

Our Approach

We worked with the client to:​​

• Review their asset and liability position to determine the best approach for the restructuring plan; ​​
• Review and assess the likelihood and capacity of the business to achieve profitability in the short to medium term; ​​
• Assist with the preparation of a cashflow forecast to ascertain the quantum of cash which would be available for plan contributions; ​​
• Assist the client identify key restructuring milestones and initiatives to provide assurance that the plan contributions are sustainable;​​
• Prepare the draft restructuring plan and engage key stakeholders; ​​
• Prepare final report and proposal for the client’s Restructuring Plan to creditors​

Key Findings and Outcomes​

The Client’s Restructuring plan was accepted which resulted in: ​​

• The business successfully maintained their construction licences which facilitated ongoing trading ​​
• The business continued to employ c.50 staff ​​
• The client made monthly contributions of $13,500 per month from profits generated by the business after the acceptance of the Restructuring Plan​​
• Creditors received a dividend of 18 cents in the dollar, whereas under an insolvency scenario the dividend was likely to be nil ​​
• The business continues to operate as a going concern

Navigate Financial Crisis with Our Specialists

Don’t face financial difficulties alone. Our Restructuring and Recovery team specialise in creating tailored restructuring plans that address your unique challenges. Get in touch with our team to explore your options today.

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