Restructuring Options

Here at Corporate Lifeline we are experts at working with Australian companies who are in financial distress. With years of experience in the field our highly talented team will work closely with you to find the right solution to your problems.

Our headquarters are based in Sydney, NSW but we have staff across Australia ready to help you o matter where your business is. Corporate Lifeline has already rescued hundreds of companies and also helped many more through their most stressful financial times and through bankruptcy/insolvency. We offer a number of solutions to restructure your company to help you turnaround your financial affairs.

Appoint a Liquidator

A Liquidator is appointed to a company generally by its director’s to wind up the Company’s affairs. A Liquidator is appointed to a company who is insolvent, i.e. there are insufficient assets to pay all of the company’s liabilities.

Once appointed, a Liquidator will take control of the company’s affairs, including its property and will realise the company’s assets to distribute the proceeds of realisation among its creditors, with any surplus being returned to the shareholders.

A company’s business can survive as it may be able to be advertised for sale and sold, so that the business can continue to serve its customers and employees retained. The company can then be wound up – not the business.

Appointing a Liquidator is a difficult decision to make for some director’s as it means that your company has failed. This may or may not be as a result of any wrongdoing by the director’s. Control of the company is removed from the director and is placed with the Liquidator, they deal with your creditors and any actions being taken against the company are stayed, i.e. they are not able to be commenced or continue. Creditors who are only owed by the company are only able to lodge a claim for their debt with the Liquidator, they can no longer sue the company. This can reduce the stress being felt by the director’s as a result of creditors pressing for payment.

At the commencement of the Liquidation, the Liquidator will convene a meeting of the creditors of the company to primarily discuss the affairs of the company and the reasons for the company’s failure. The creditors will also approve the costs of the Liquidation, which are primarily paid from the assets of the company. Creditors can then contact the Liquidator for details regarding the company.

During the course of the appointment, the Liquidator will request the books and records of the company from the director’s and will want to discuss the affairs of the company. A Liquidator must review the records and conduct investigations into the company’s property, business and affairs. It is much easier and less costly for the Liquidator if the director’s co-operate during this process. At the conclusion of these investigations a report is prepared and submitted to the Australian Securities & Investments Commission (“ASIC”) detailing the results of the investigations. Creditors are informed regarding the results of the investigations too. Once all matters are dealt with, the company’s affairs can be finalised and the company de-registered.

A company has generally been struggling for some time before the decision to seek advice and appointing a Liquidator occurs. However, as is often the case, waiting for a problem to resolve itself without doing anything to change it rarely works out. Proactive steps must be taken to deal with the issue. It is important to seek help early, as this increases the chance of your business and/or your company continuing.

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Appoint a Voluntary Administrator

The team at Corporate Lifeline has experience in consulting on and dealing with Voluntary Administrations.

A Voluntary Administration is an avenue for an Australian entity experiencing financial difficulty to appoint an independent External Administrator to take control of the affairs of the company, to allow the Company some breathing space from its creditors and to determine the future direction of the company.

The main benefit about appointing an External Administrator and pushing for Voluntary Administration is that an insolvent company has the opportunity to be saved.

The appointment can be made by Directors and there is no need for the Courts to be involved. One thing to note is that a Deed of Company Arrangement (DOCA) may follow a Voluntary Administration which allows a return of the Company to the Director(s) and all unsecured creditors are bound by the Deed. Read more on Deed of Company Arrangements here.

A Voluntary Administration can maximise the chances of a company continuing to exist coupled with the return to creditors and saves you from insolvency and entering into liquidation. Directors, by appointing an Administrator, can avoid personal liability. The appointment imposes a moratorium on debt enforcement i.e some breathing space to allow you time to restructure your affairs.

In addition, company guarantees cannot be enforced against directors when an Administrator is appointed. Also, if a Deed of Company is accepted it will release directors from insolvent trading claims by creditors.

Want more information? Read more on Voluntary Administrations here. Alternatively, feel free to contact us and we will gladly provide you with the information you need.

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Deed of Company Arrangement Execution

Our consultants have a solid track record in implementing successful Deed of Company Arrangements, after the Voluntary Administration process.

A Deed of Company Arrangement (DOCA) is a binding arrangement between a company and its creditors setting out how the company’s affairs will be dealt with to resolve the company’s debt problems without the need  for liquidating the company.

A DOCA is formulated and proposed by the Director(s) and/or a third party during the Voluntary Administration of company and is set out to creditors in the Administrator’s major report. Creditors are then asked to accept the terms of the DOCA by passing a resolution that the company execute a DOCA at the major meeting of creditors.

A DOCA can be very flexible depending on a company’s circumstances and requirements. Once a DOCA is accepted, all unsecured creditors are bound by the DOCA. Full control of the company normally reverts back to the Directors. A DOCA can be a ‘fresh start’ for a business once the DOCA is executed.

Contact us to discuss whether a Voluntary Administration / DOCA is your best option in helping your business.

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Informal Restructure & Workouts

Our experts have implemented some of the most successful workouts in Australia and can help:

– Source opportunities for companies to borrow further funds which  can be used to pay your debts
– Obtain further funds by way of equity capital injection opportunities
– Convert short term debt to long term debt through debt negotiation
– Sale of non-core business/asset units or closure of non-performing business/asset units
– Streamline complex group structures

There are a number of benefits to an informal workout as they allow the maintenance of goodwill with suppliers, creditors and customers. Sometimes, by fixing critical aspects of a company’s balance sheet deficiency through an effective restructure, you can convert an insolvent company to a solvent company in no time at all and prevent insolvency/liquidation. Over the past year we have helped many companies turn themselves round with a simple restructure.

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Solvency Analysis

Our consultants have advised numerous entities regarding their financial position and conducted a solvency analysis, including listed entities on the ASX. If you would like a solvency review of your company, please contact us.

Insolvency is based primarily on the cash flow test, being the ability to pay debts as and when they fall due. This corresponds with the definitions contained in the Corporations Act, which states an entity is insolvent if it cannot pay its debts as and when they fall due. The inability to pay debts is linked directly to the inability to obtain immediate cash and to pay debts being “due and payable”.

There are benefits in obtaining a solvency analysis. Directors that are found trading a company whilst insolvent could face serious consequences, including personal liability for debts incurred and criminal offences. As such, it is strongly recommended for Directors to get qualified opinions in regards to whether their company is insolvent or likely to become insolvent.

Is your company going under? Unfortunately, determining whether a company is insolvent is not always easy. This has been shown through numerous legal cases that have dealt with this issue. However there are key indicators commonly found in many insolvent companies which we can easily identify.

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Business Performance Improvement

Our consultants can assist in improving the performance & positioning of your business. Contact us to receive information on how we can help improve the performance of your business.

Key services offered by our consultants in improving business performance are;

– Advise businesses how to reduce losses / increase profits
– Teach businesses how to achieve overall improvement and how to measure it
– Teach proper management skills
– Costings
– Profit Centres
– Business plans

The key units of an organisation that are analysed for improvement are as follows:
>Financial >Operational >Sales >People >Technology

The benefits to contacting Corporate Lifeline at any time has many advantages. Our consultants can assist your business and have access to an extensive national and global network of multi- disciplined professionals so that each client is provided the right advice tailored to their needs for business performance improvement.

Here at Corporate Lifeline we understand that every business is different and therefore we have teamed up with external partners enabling a diverse background harnessing collective operational and financial expertise to be able to deliver significant added value to any type of business within short time frames.

The combination of expertise from our diverse personnel facilitates you working with people that have ‘real’ operational and financial experience. Each assignment is undertaken with a considered approach and on a case by case basis in consideration of the entity’s unique circumstances, goals & objectives.

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