When experiencing financial challenges within your business, it is important to understand your options to make informed decisions that will lead to the best outcome possible for your company. We can help you navigate the voluntary administration process by designing and executing a plan to set and meet expectations – with no need for a Plan B.
What is a voluntary administration?
The voluntary administration process provides companies experiencing financial difficulty with breathing room to continue trading while:
- restructuring debt
- reshaping the operational model of its business (if necessary).
Voluntary administration means that an organisation experiencing financial difficulty can maximise its chances for a successful turnaround and continue as a business in its current form – or in some capacity.
Where sustainable turnaround is not possible, voluntary administration can help to create a better return for the company’s creditors, members and other stakeholders, instead of immediately winding up the company.
It’s a process best used where an organisation – while having financial pressures – is able to demonstrate a viable (restructured) business model.
The voluntary administration procedure achieves this by:
Creating a legal moratorium – or suspension – on creditor claims being enforced (including equipment financiers, landlords and trade suppliers) — in essence, all assets in possession of the company (including plant & equipment and stock) at the time of administration will remain with the company unless the administrator consents otherwise
Allowing administrators to ‘reshape’ the business model by terminating the company’s obligation to continue payments for:
- underutilised leased equipment
- underperforming leased premises
- underutilised staff
Providing key stakeholders (including trade creditors) with the confidence to continue supporting the business (i.e. supplying stock) during the restructure as a consequence of a statutory guarantee for payment for goods or services provided to the administrators.
During the administration period, the voluntary administrators work with the company’s directors to formulate a proposal to creditors to restructure the company’s debt — known as a Deed of Company Arrangement or DOCA. If creditors accept this, the company can return to the director’s control and continue trading under the new structure.
How we help
As qualified administrators, we are able to immediately begin an assessment of the financial position of your business and the required crucial next steps – like how to pay debts and if divestment is required – irrespective of business size or industry in which you operate.
We help you by:
- taking control of the trading of the business
- minimising the impact on employees, creditors and/or shareholders
- working closely with creditors to find potential opportunities for repayment
- assisting in managing debt, recovering certain bad debts and resolving the warranty claim handling process
- conducting financial modelling
- initiating Deed of Company Arrangement.
Our strength lies in the quality of the service that we deliver. With voluntary administration appointments, that means we strategically and carefully map it out to ensure all stakeholder expectations are clear and met the first time.
We are a highly respected full-service firm incorporating specialist financial advisory capability and providing high-level sophistication across all jobs - no matter the size or complexity.
Our reputable footprint in the market and strong relationships with financiers supports our ability to get the desired outcome.