What was the situation? 

Our client operated a short-term rental accommodation business which was heavily reliant on overseas students and hospitability workers. Thus, it was deeply affected from plummeting revenue because of sustained COVID-19 restrictions.

With government aid packages coming to an end and accumulated insurmountable debts, the small business owners reached out to us for our help.

What was our strategy?

Following an assessment of the financial position, we determined that the business was eligible to enter a small business restructuring process (SBR) to forge a pathway to recovery. Please refer to our previous article which discussed the eligibility criteria and the main elements of the new SBR process.

During the SBR process the directors remained in control of the day-to-day operations, whilst we helped them formulate a restructuring plan which, given the circumstances, provided the best possible outcome for all stakeholders.

Furthermore, we engaged with creditors to explain the reasons behind the business’ challenges, addressed their queries and determined whether the company was able to fulfil its restructuring plan that it intended to put to its creditors.

What was the outcome?

The creditors of the business approved our client’s plan which stipulated a partial return on their claims. Following acceptance of the plan, which binds all admissible debts, we worked with the business owners to facilitate the plan payment to creditors.

Ned Talic, restructuring practitioner, commented:

“This new process allows business owners to stay in control whilst we roll up our sleeves to assist them with putting their best foot forward to their creditors. The art lies in communicating with all stakeholders during a stressful situation which aims to strike a balance between giving a business an opportunity to recover whilst providing a realistic return to creditors that is acceptable to them.”

How can Charles & Co. help you?

Our Team with more than 50 years combined experience is well placed to help businesses in a range of challenging and distressed situations. We encourage anyone experiencing financial and/or operational distress to contact us to discuss your options.