With 1 January 2021 fast approaching, directors may need to consider if a company’s business requires significant debt restructure to survive and escape insolvency. The proposed changes to insolvency laws are designed to:
- Keep control of distressed businesses with owners
- Restructure viable businesses and retain employment
- Increase the speed of business restructure and reduce costs
- Increase the timing and return to creditors of restructuring and liquidation
Businesses in financial difficulty – Important Information for Directors
Directors who intend to consider a simplified insolvency restructure as an alternative to Voluntary Administration or a simplified liquidation should give consideration to the proposed changes and prepare the business to ensure both eligibility and increased prospects of success.
Customers in financial difficulty – Important Information for Suppliers and Lenders
Suppliers and lenders may need to review exposures to potentially insolvent debtors, credit policies and procedures. Failure to review these exposures can have significant impacts on revenue and even worse consequences may follow.
Time is of the essence in dealing with these issues for companies operating small businesses.
If you require assistance, you should contact your accountant or lawyer to seek advice without delay.
Tim Hayter, Principal, Mid West Lawyers
This information is general in nature and should not be relied upon as legal advice. Formal legal advice should be sought for your particular circumstances.