While Voluntary Administration is not the best option for all struggling businesses in Australia, it does have some key benefits compared to other insolvency options. In this piece, we look at the best parts of Voluntary Administration and some of the benefits of this mechanism compared to alternative responses to company distress.
When a business is in serious financial trouble, what is the best path ahead? This is, of course, a question for the directors of struggling businesses themselves, but it’s also a question for their lawyers, accountants and creditors.
While insolvency in Australia is a heavily regulated industry, historically, there is one segment of the industry that has had little oversight: pre-insolvency advisers. Arguably, this has been a detriment to the broader industry as the highly trained professionals in…
Corporate insolvency practitioners are important gatekeepers in the economy. In Australia, there is a paradox that the system is designed to try to stop the insolvency practitioner from giving meaningful pre-insolvency advice to insolvent businesses. This is a pity because insolvency practitioners are well-placed to give pre-insolvency advice.
Small-to-medium sized business owners can’t effectively outsource the responsibility for driving a turnaround process when their business is in financial trouble. They can hire sensible staff and competent professional advisors but they are the only people with the incentive (skin in the game) and experience (because they started the business) to drive forward a turnaround process.
Be careful who you hire to help you with your problems and make sure they share the same commitment to your business as you do!