Insolvency Case Studies
Struggling Family Business Avoids Insolvency
Insolvency Practitioner Case Studies
When a company is facing financial difficulty, it’s essential to consult an experienced insolvency practitioner, who has a duty to investigate and report to creditors on the company’s affairs, keep records and enquire into why the company failed, including reporting any offences to ASIC and distribute the proceeds of the liquidation.
Additionally, at the Insolvency Advisory Centre, we can advise clients who are seeing the first signs of Financial difficulty to avoid Insolvency.
Situation
Insolvency Advisory Centre was approached by a couple struggling with their family business and its financial situation. They believed the company was viable but running through a short downturn. However, they couldn’t understand why.
After a review of the business, including an analysis of the Balance Sheet, Profit and Loss, ageing of creditors, and an assessment of current and future contracts, we were able to identify a significant fault in the cost of their product. This was quite a shock to the client, who believed they were profitable whilst competitively priced. Essentially, they had not factored in the cost of superannuation, their wages, or the cost of staff on holidays etc.
Key Point: This costing error was slowly eroding their profits.
Solution
With our assistance, they adjusted their prices and set up a monitoring system to ensure their pricings are always including all costs of operation. We also explained the consequences of failure and how it would impact them so they understood the need to maintain a close watch on their margins. In this company restructuring insolvency case, the client was able to avoid liquidation.
Result
We recently followed up on how they were going, and they advised us that they were now doing well (albeit the market was tough). With their new monitoring system in place, they could review their margins to accommodate the recent increases in interest rates.
This example shows that Insolvency Advisory Centre are not just experts who deal with failed companies but can also assist you in stopping business failure. Through our liquidation case studies and previous experience, we could assist the client in avoiding Insolvency.
Small Business Restructure - Case Studies
Situation
The Insolvency Advisory Centre was engaged to assist in a business restructuring. We discussed the various ‘formal’ options with the client: Voluntary Administration, Liquidation, simplified liquidation, and the new ‘Small Business Restructure‘.Solution
We believed that the Small Business Restructure would be the appropriate mechanism. Our team reviewed the company’s financial information and was setting up the restructuring when COVID-19 impacted all businesses in Australia. As the Business Restructuring process requires a significant lead in time to establish that the company’s fundamentals are solid, we took this opportunity to negotiate with the Bank and significant creditors.Result
After establishing the relationship between the primary stakeholders, we negotiated a path for the company to pass through its troubles, as we were able to help the client implement some of the small business restructurings suggested. They are now back to being a stable and viable company.Andrew Bell Insolvency Advisor
Let’s Talk
With over 30 years of experience in debt solutions and insolvency in Australia, Andrew can find a solution for you.
“Nothing is more satisfying to me than knowing that I’ve helped someone get back on their feet by guiding them through the Insolvency Process. As these case studies show you can rest assured; you’re in good hands with me as we solve your financial problems together.”
