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RESTRUCTURING & TURNAROUND
RESTRUCTURING & TURNAROUND
When business gets tough, we get strategic.
If a company is under financial pressure, it’s critical to act early before options disappear. At DVT Mcleods, we help directors and their advisers assess the situation and apply the most suitable solution to restructure, stabilise or wind down a business in the most effective way.
Whether through formal processes like Voluntary Administration or Safe Harbour protection, or more flexible informal options, our experienced team works alongside directors, lawyers, accountants and financiers to deliver better outcomes for all parties involved.
How We Can Help
We provide a full range of restructuring and turnaround solutions across Australia, including:
- Voluntary Administration (VA)
- Deed of Company Arrangement (DOCA)
- Small Business Restructuring (SBR)
- Members Voluntary Liquidation (MVL)
- Safe Harbour
- Informal Arrangements
Each situation is different. Early advice can mean more options.
Why Choose Us
For Individuals
- Straightforward guidance in plain language
- Prompt action and options tailored to their situation
- Support at every step — from plan to execution
- Commercial outcomes, not cookie-cutter processes
- Responsive and experienced practitioners
- Solutions that balance legal, financial, and commercial needs
- A collaborative approach that protects your client relationship
- Confidence that your client is in trusted, capable hands
For Advisors
- Straightforward guidance in plain language
- Prompt action and options tailored to their situation
- Support at every step — from plan to execution
- Commercial outcomes, not cookie-cutter processes
- Responsive and experienced practitioners
- Solutions that balance legal, financial, and commercial needs
- A collaborative approach that protects your client relationship
- Confidence that your client is in trusted, capable hands
Act Early, Act Now - Free Consultation
If your company is in financial distress or you’re advising a client who is, the sooner you speak with an expert, the more options you’ll have.
Contact us today for a free, confidential consultation.
- Eligibility for Safe Harbour or SBR
- Pros and cons of VA vs informal restructuring
- Director obligations and legal risk
- Creditor negotiations and timelines
- Strategic planning and stakeholder management
We don’t just guide the process — we help shape the outcome.
We provide a full range of restructuring and turnaround solutions across Australia, including:
VOLUNTARY ADMINISTRATION (VA)
VOLUNTARY ADMINISTRATION (VA)
VA is a formal process where an independent Registered Liquidator (the Voluntary Administrator) takes control of a company to assess its affairs and recommend the best course of action. It provides immediate relief from creditor pressure and a chance to restructure.
WHEN IT APPLIES:
When a company is insolvent or likely to become insolvent, and immediate action is needed to prevent further loss or trigger a turnaround.
WHY APPOINT A VOLUNTARY ADMINISTRATOR?
During VA, Creditors can’t take legal action against the Company, giving it “breathing space” to plan how to restructure or repay debts.
The Administrator takes over and may continue trading, investigating the Company’s affairs and considering restructuring proposals.
WHAT IS THE END-RESULT OF A VA?
The Creditors decide the VA’s outcome, which could be:
- End of VA, returning the Company to pre-VA state;
- Placing the Company into liquidation; or
- Accepting a restructuring or repayment plan.
DURATION:
VA typically lasts about 5-8 weeks but can be extended in some instances. Appointments made in December or near Easter may vary by up to 5 business days.
| Day 0 | 8 Business Days | 9-21 Days | 25 Business Days | 15 Days |
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Creditors to resolve either:
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- Immediate protection from legal action
- Independent control of the Company
- A proposal (such as a DOCA) may be developed
- Creditors decide the future of the Company within weeks
- A clear, structured process for dealing with financial distress
- Transparent reporting to creditors and stakeholders
- Confidence that legal and commercial risks are being managed professionally
DEED OF COMPANY ARRANGEMENT (DOCA)
DEED OF COMPANY ARRANGEMENT (DOCA)
A DOCA is a binding agreement between a company and its creditors that outlines how debts will be repaid, restructured, or compromised over time. It is proposed during Voluntary Administration and must be approved by creditors.
WHEN IT APPLIES:
Where the business is viable and creditors agree there’s more value in supporting a restructure than in winding up.
DURATION:
Typically 12–36 months, depending on the terms. Lump-sum DOCAs may be shorter.
- Flexibility to restructure debts while continuing to trade
- Control of the business may be returned post-DOCA
- Release from unsecured debts upon completion
- Retention of client goodwill and business continuity
- Potential for higher creditor returns than liquidation
- A roadmap to support the business post-crisis
SMALL BUSINESS RESTRUCTURING (SBR)
SMALL BUSINESS RESTRUCTURING (SBR)
SBR is a formal but simplified process that allows eligible small businesses to restructure their debts while remaining in control. Directors work with a Registered Liquidator to put forward a repayment plan.
ELIGIBILITY:
- Total liabilities less than $1 million on the date of appointment
- Excluding employee entitlement
- Include related party debts unless forgiven before the appointment
- Including secured creditors debt amount to the extent of the shortfall in the value of the assets over which the secured creditor has a security
- The Company must be up to date or substantially up to date with the tax lodgement
- All outstanding employee entitlements paid before the Restructuring Process are put to creditors
- The Company or its directors (within 12 months) have not used SBR or simplified liquidation process within the past 7 years
- Group of companies can appoint SBR within 20 business days of each other
WHEN IT APPLIES:
- Small businesses with less than $1 million in liabilities; or
- Received a DPN or are being pursued by creditors; or
- Received garnishee orders issued by the ATO; or
- Received a winding-up application by the ATO; or
- Have payment plans with the ATO; or
- Being reported for tax debts over $100k; or
- Short-term cash flow issues, may be caused by uncontrollable events.
IMPLICATIONS FOR THE DIRECTORS
It is important to note that SBR is a formal insolvency appointment. While SBR allows directors to remain in control, it does not eliminate all personal risks. Directors should be aware of the following:
- Personal Guarantees | SBR does not extinguish personal guarantees. Directors remain liable for any amounts not recovered through the restructure.
- Director Penalty Notices (DPNs) | If a DPN has already entered lockdown, the SBR process will not resolve it — and the ATO can still issue or enforce a lockdown DPN during or after the process, including converting an expired DPN into a fully personal liability.
- Related Party Debt Forgiveness | Forgiving debts owed by the Company to directors or related entities may have tax or legal consequences.
- Personal Credit Rating | While SBR is a company process, directors’ credit files may still be affected, particularly if personally guaranteed debts are called in.
- Unintended Consequences | As with any insolvency process, there may be unforeseen impacts, including reputational issues or triggering of default clauses in contracts or leases.
| Pre-appointment | Stage 1 Proposal Period | Stage 2 Acceptance Period | Stage 3 Plan Period |
| Review and assess the clients for potential SBR | 20 business days, can be extended for extra 10 BDs | 15 business days unless extended | Max 3 years from the SBR appointment |
| Identify the potential risks | ASIC Status changed to “EXAD” | ASIC status remained in “EXAD” | ASIC Status changed to “Registered” |
| Understand the compliance history of the clients | Clients trading as normal | If >50% of creditors in value who vote for, binding on all creditors | Practitioner will continue monitoring the plan payments and distribute |
| Discuss the potential restructuring plan | Cannot sell assets without approval | Related party vote excluded | Pre-SBR liabilities are extinguished |
| Accountants to commence groundworks | All unsecured debts before the SBR appointment are frozen | Accepted > Plan Rejected > next course of actions |
- Directors remain in control of daily operations
- Reduced costs compared to VA
- A formal proposal presented to creditors for approval
- Improved cash flow and reduced creditor stress
- A lower-cost, faster restructuring tool
- Less disruption to the business
- An option that balances control with accountability
MEMBERS’ VOLUNTARY LIQUIDATION (MVL)
MEMBERS’ VOLUNTARY LIQUIDATION (MVL)
Not all liquidations arise from insolvency. When a company is solvent and the shareholders decide to close the business, a Members’ Voluntary Liquidation (MVL) is the appropriate process.
WHEN IT APPLIES:
The Company must be solvent, with directors signing a Declaration of Solvency stating the Company can pay its debts within 12 months.
DURATION:
Generally, 3 to 6 months, including the declaration of solvency, asset realisation, and distribution to members.
This allows for an orderly wind-up and distribution of assets, often with tax and strategic benefits for the shareholders.
Our team helps directors navigate the declaration of solvency, ensuring compliance and smooth completion of the Company’s affairs.
- Structured and orderly wind-up of a solvent company.
- Clear guidance through the Declaration of Solvency process.
- Efficient realisation and distribution of assets to members.
- Minimised tax risks and maximised value for shareholders.
- Timely completion with full regulatory compliance.
- Confidence that your client’s solvent liquidation is managed with precision and care.
- Smooth coordination to ensure legal and financial requirements are met.
- Clear communication supporting client reassurance and decision-making.
- A partner that enhances your reputation for prudent business advice.
SAFE HARBOUR
SAFE HARBOUR
Safe Harbour allows a company’s directors to implement a “rescue strategy” intended to rectify the financial situation rather than make it worse. It can help a company avoid future claims of insolvent trading against its Directors by liquidators. As the requirements are extremely specific, it will likely be most beneficial to larger corporations.
WHEN IT APPLIES:
Where directors suspect insolvency but are taking active steps to improve the company’s financial position, before any formal appointment is made.
HOW TO GAIN ACCESS:
The Directors must ensure the following:
- All employee entitlements are paid as and when they fall due;
- Necessary documents as required by the Taxation laws are lodged (Tax Returns, Activity Statements, etc).
- Obtain and follow advice from a qualified entity, and give them sufficient information to assist; and
- Develop and implement a plan for restructure.
- Continued control of the Company
- Time to develop and implement a strategy
- Reduced legal risk for directors
- Confidential — no public disclosure required
- Early engagement before formal insolvency
- Preservation of business value
- Legal protection for directors while they work on a plan
INFORMAL ARRANGEMENTS
INFORMAL ARRANGEMENTS
An insolvent company can enter an informal arrangement with its creditors. The informal arrangement normally specifies how the Company will repay or compromise its debts.
The significant disadvantage with this alternative is that it only takes one creditor to reject the informal arrangement and place the Company into liquidation.
WHEN IT APPLIES:
In the early stages of distress, when the business is still solvent or trading but under pressure, and when stakeholders are open to working cooperatively.
DURATION:
Highly variable — typically 1 to 3 months, depending on creditor responsiveness.
INDUSTRIES
Our team of professionals brings a wealth of experience across a range of industries.
Having been exposed to various work environments and circumstances, we have honed our expertise in adapting to change and taking a personalised approach to offer strategic solutions.
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