Recently MaC Insolvency saved a small family waterproofing business on the brink of court ordered liquidation, by implementing a formal business restructure as Voluntary Administrators.  The successful restructure, undertaken within a short one month timeframe, will see the business continue and employees keep their jobs. Working closely with the business owners along the way, here’s a brief explanation of how the team at MaC Insolvency achieved such a great result for stakeholders.

The Difficulties Faced by the Business

  • The business had been severely impacted by a sharp downturn in work and jobsite disruptions due to the COVID-19 pandemic which in turn had a detrimental impact on the Company’s cashflows, its ability to pay trade creditors and the Australian Taxation Office.
  • The Company’s major supplier, also a significant creditor, initiated winding up proceedings against the Company which if heard would have resulted in the Company being placed into liquidation and wound up.
  • A large ATO debt due to cashflow issues and trading losses which was unable to be rectified via a payment arrangement due to non-lodgements.

The Solution Implemented by MaC Insolvency

  • A review into the businesses projected revenue, project margins and cashflows over the next 12 months by the Administrators;
  • The recommendation and implementation of measures to improve projected cashflow and margins going forward;
  • The formulation of a restructure proposal in the form of a Deed of Company Arrangement with the Company’s Director which satisfied pre-existing debts (including the ATO) created due to the difficulties faced by the business; and
  • The negotiation and agreement with the major creditor to dismiss the winding up proceedings.

 The Outcome

  • A family operated business which can continue to operate a viable business moving forward with measures implemented to improve cashflow and profit margins;
  • Continued employment and the avoidance of redundancies;
  • An agreement to settle existing creditor debts via an initial upfront payment and periodic payments over the period of 11 months via the restructure proposal;
  • The ATO’s acceptance of the restructure proposal via a Deed of Company Arrangement;
  • The dismissal of the winding up proceedings against the Company; and
  • The return of control of the Company to its Director.

If your business is facing the difficulties above and you need expert advice, contact the team at MaC Insolvency we are solutions orientated and  here to help with over 40 years of experience in dealing with corporate restructuring and insolvency for struggling businesses.

Contact us now on (02) 8002 9580 for a free consultation.