Preserving Business Value via a Creditors’ Trust

Client Overview

The company is a long-established real estate and property services business operating across South-East Queensland, providing residential sales, property management, leasing, and related property advisory services.

Over time, the business encountered financial distress after accumulating significant liabilities, including secured debt, employee entitlements, and substantial unsecured creditor claims. Without intervention, the company faced the prospect of liquidation, which would have resulted in the loss of all business value, closure of the business, termination of management agreements, and redundancy of a large workforce.

The company’s financial challenges were driven by a combination of legacy taxation and superannuation liabilities, high fixed operating costs, secured lending arrangements tied to core assets, and the real risk that liquidation would materially erode the value of the business’s rent roll and goodwill.

At the time of appointment, the company employed approximately 25 staff members, and a cessation of trade would have resulted in widespread disruption to employees, landlords, clients, and creditors.

​Engagement Scope​

Vincents was appointed as Voluntary Administrators to assess the company’s financial position, stabilise operations, investigate its affairs, evaluate restructuring options, and implement an approved restructuring outcome for the benefit of creditors and stakeholders.

Our Approach

Our focus was on preserving the company’s business as a going concern. We continued trading, ensured compliance with trust account and employee obligations, whilst also meeting creditor debts. We engaged with the company’s management and advisers and formulated a proposal which would result in the best outcome for all stakeholders.

Key Findings and Outcomes

Creditors approved a formal restructure plan and a Deed of Company Arrangement (DOCA) that provided a materially better outcome than a liquidation of the company. The restructure preserved employment, ensured continued trading, provided certainty of funding for creditors, and delivered a significantly higher return to unsecured creditors than would have been available under a winding up.

The Creditors’ Trust – What It Is and Why It Matters

A Creditors’ Trust was established as part of the formal restructure. Funds contributed under the DOCA were paid into the Trust, with creditors then becoming beneficiaries of the Trust, rather than remaining creditors of the company.

Helping Businesses Rebuild with Confidence

Our Restructuring and Recovery specialists work closely with business owners and stakeholders to stabilise distressed businesses, preserve value, and find solutions which can salvage a business whilst delivering a far better outcome than a liquidation.

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