What was the situation?
A carpentry business approached Charles & Co amid increasing financial pressure, with mounting tax debts and other creditor obligations weighting heavily on the company. Rather than focusing on their clients and growing the business, they found themselves consumed by financial pressure with no clear way forward.
Recognising the need for a structured and timely solution, the business engaged Charles & Co to guide them through a formal Small Business Restructure.
Our Approach
In line with Charles & Co’s hands‑on and practical methodology for navigating distressed scenarios, our team worked closely with the owners and their advisors to shape and deliver a plan that creditors could support.
Financial Assessment & SBR Eligibility
Our first step was a thorough review of the company’s financial position to confirm that the business was eligible for the Small Business Restructuring process. We examined the company’s outstanding liabilities, cash-flow pressures and evaluated whether the business had the operational capacity to continue trading.
Development of a Practical Restructure Plan
Working closely with the directors, a contribution-based proposal was developed using a combination of director funding and future trading cash flow. The structure was designed to balance a fair outcome for creditors against the working capital required to sustain the business.
Creditor Communication & Proposal Management
Charles & Co coordinated the formal restructuring process by managing debt verification, addressing creditor queries, providing the information required for creditors to consider the plan and overseeing the voting process. Throughout the restructure, the directors remained responsible for the day-to-day operations.
What was the outcome?
The restructuring plan was successfully approved by creditors and all required plan contributions were subsequently completed. As a result, the company was able to settle the historical debt under the plan while continuing to trade.
- The business avoided liquidation and continued to provide carpentry services.
- Affected creditors received a partial return under the approved agreement.
- The business emerged with an efficient operating structure, improved financial discipline and a more sustainable platform for future success.
Impact
This case shows that financial distress does not necessarily mean the end of a business. Where the underlying operations are viable and directors act early, Small Business Restructuring can provide a structured opportunity to compromise historical debt, preserve the value of the business and deliver a better outcome for creditors than liquidation would.
How can Charles & Co. help?
With over 50 years of combined experience, our team is well-equipped to assist businesses facing various challenging and distressed situations. We encourage anyone experiencing financial or operational distress to contact us to discuss your options.