Directors often encounter a delicate balancing act in times of corporate financial distress. Difficult decisions must be made in relation to the competing interests of creditors and the strategic ambitions of the business.
In addition, directors need to be mindful of ensuring they preserve the protection afforded by corporate trading structures and do not inadvertently expose themselves to civil or potential criminal liability for debts incurred or actions of the company.
Grant Thornton’s experts can assist directors to navigate these difficult times by:
- Assessing eligibility for Safe Harbour protection, and the provision of safe harbour advisory services
- Managing the controlled wind-down of non-performing or redundant operations and simplification of corporate structures
- Ensuring that directors interests are protected when personal funds are advanced to recapitalise a distressed business
- Advising on the optimal approach to restructuring and rationalising debt facilities with secured creditors and providing assistance with negotiations
- Negotiating informal repayment arrangements and/or debt compromises with key creditors
- Establishing trading and wealth preservation structures to ensure mitigation of risk to adverse events
- Managing directors’ risk of personal liability arising from:
- ATO Director Penalty Notices (outstanding GST, PAYG, Superannuation, Wine Equalisation Tax, Luxury Car Tax)
- ATO indemnity claims (where the ATO is required to remit monies due to a Liquidators’ voidable transaction claim)
- Breach of Director Duties Claims, Insolvent Trading and other basis of personal exposure (such as OHS and Environmental Chain of Responsibility)
- Personal guarantees provided for company debt
- Where necessary, providing guidance through the external administration process (including liaising with key stakeholders)
- Providing litigation support including the provision of expert testimony on matters such as business solvency.
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