Company Informal Restructuring
Company Informal Restructuring

We Have Multiple Effective Options And Protection Strategies

Turnaround and Informal Arrangements
- Turnaround and informal arrangements can provide an effective strategy if effectively managed. Most businesses will suffer a deterioration in trading at some stage either through economic conditions or the loss of a key customer…….even a Pandemic.
- If you are confident in the product or service being supplied and believe the company has a future then adopting this approach could be the solution.
- Planning and implementing the required corrective action such as company restructuring, cost reduction, concentration on financially viable ‘core products’, and increasing financial control can help towards returning the company to profitability
- Taking the informal approach requires contact with the major creditors whose support will be required if the business is to move forward. A detailed explanation of the cash flow with a realistic time scale for the repayment of the debt will assist in obtaining the support of the creditor.
ATO Negotiation
As every situation is different, there is no specific approach to take when negotiating a payment arrangement with the ATO. However, in most cases we advise the ATO of:
- The estimated return they’ll receive if the Company were to go into liquidation compared to accepting the proposed payment arrangement;
- The company’s estimated future profitability, along with any profit improvement or turnaround strategies it has put in place.
We’ve found this approach to be particularly effective when dealing with the ATO. Most companies placed in liquidation will provide the ATO with little (if any) return.
Arrangements can also take the form of paying the ATO debt over a period of time, but by first negoitaiting with the ATO to agree to write off the interest and penalties it had charged.


Safe Harbour
Amendments to the Corporations Act 2001 were made in September 2012 which introduced a new section, s588GA to protect directors from personal liability for debts incurred by an insolvent company if they take a course of action that is reasonably likely to lead to “a better outcome for the company and its creditors”, compared to the appointment of a Voluntary Administrator or a Liquidator.
The section permits Directors to incur company debts during a”‘restructure/turnaround period”, without the risk of being held personally liable for those debts if they cannot be repaid.
PPSR Charges over Assets in Your Company
- Small business owners and Directors need to protect themselves like a bank with a registered secured loan when they are owed money by their Company.
- Money owing can include initial and additional capital investment, unpaid wages etc. If, for example, you have borrowed money against your house and invested it in the Company, you should immediately secure your investment against the Company assets. This can be done no matter how long ago you provided funds to your Company.
- This legally promotes you to ‘secured creditor’ status, like a bank, so that if your Company becomes financially distressed, you will get paid back your debt before anyone else (subject to timing issues which we can explain).

Other supporting options we have may include:





What Do I Do Now?
We know everyone’s situation is different and that’s why we have such a tailored approach for each of our clients. The best thing you can do is act promptly, call us today and get the expert advice you need as soon as possible.

Consultation
Book a discovery call with one of our friendly experts to take a deep dive into your finances and investigate your concerns.

Strategy Session
After assessing your situation, our team report back with the best option for your business recovery.

Execution
This is where we fix your problems and get you the best outcome for you and your company.
Case Studies

Aaron received a Director Penalty Notice for $350,000, and as a result, had less than 21 days to do something about it. Fortunately, his Company accountant contacted us and we immediately put a strategic plan in place to not only reduce the debt by $200,000 including our fees, but we were able to reduce his loan account to the company from $750,000 to $10,000.
Aaron M

Russell’s daughter’s business was experiencing financial difficulties post-pandemic and sought our help. Having seen the volume of Director Penalty Warning Notices that were sent to Directors of SMEs in March 2022, the strategy was to sell her business to a new company (which included a future for her in the new company going forward). We then negotiated a settlement with the ATO for the existing debt in order that she avoid being personally liable for the ATO debt.
Russell F

Steve received Director Penalty Notices for two of his related companies for $850,000 and $535,000 respectively. He had experienced several set backs over the prior two years including the Pandemic, a health scare, and rising costs in his industry. We organised for a Voluntary Administrator to be appointed, holding his hand through the entire process, allowing him to keep the business and settle his debts at 12c in the $.
Stephen M
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