Business Restructuring Specialists
All businesses have a life cycle, and BDO Tauranga offers Business Restructuring Services for those times when things may not be going to plan.
Understanding how to navigate these times will help business owners maintain some control over how the situation plays out. Knowing what can be salvaged, what is no longer viable, and how to manage your stakeholders through turbulent times are all important in gaining the best possible outcome. At BDO Tauranga we are experienced at making the tough decisions and can guide you through the process with professionalism and respect.
- Liquidations can either be solvent (i.e. all creditors can be paid) or insolvent (i.e. insufficient funds likely to pay all creditors). A liquidation is the winding up of a company’s operation and leads to its removal from the New Zealand Companies Register.
- The process can be started by the company’s shareholders (a voluntary liquidation) or following a court order on the application of a creditor of the company.
- In either situation, the liquidator’s role is to realise the assets of the company for the benefit of creditors. Legislation sets out the order in which creditors of the company are paid out in a liquidation. After all creditors are paid in full (if that is possible) any remaining funds are distributed to the company’s shareholders.
- Liquidators are given wide powers to investigate the affairs of the company.
Companies in Receivership
- Receivership is a process where a secured creditor (usually, but not always, a bank) appoints an independent third party (receiver) to realise assets to repay the debt owed by a company to the secured creditor. The ability to appoint a receiver is set out under the terms of a security agreement.
- A receiver is generally appointed by a creditor who has security over the whole or the majority of a company’s assets. A company can be in liquidation and in receivership at the same time.
- Once the receiver has repaid the secured creditor he then retires and returns the company to the directors (who can then trade the company on if they wish and/or deal with the unsecured creditors) or a liquidator, if one has been appointed.
Voluntary Administrations and Compromises
- Voluntary administration is a relatively new insolvency procedure in New Zealand and is designed to be used by companies that have the possibility of returning to being profitable or can obtain a better outcome for creditors than in a liquidation
- The process is initiated by a company’s board of directors who appoint an administrator. The administrator takes control of a company’s assets and provides an expert recommendation to the company’s creditors who elect the best course of action going forward in terms of the company’s future. This may be: appointing a liquidator; entering into an agreement with creditors to restructure the debt (known as a Deed of Company Arrangement); or returning the company to the control of its board of directors.
- This flexible, rehabilitation-focused option is designed to maximise the possibility of a company returning to profitability and often provides a better return to creditors than an immediate liquidation.
- Compromises with creditors are another option. These can be informal arrangements to which creditors agree or more formal court approved arrangements. We can advise on such arrangements and assist with imnplementation.
- Turnaround involves evaluating a business, identifying any underperforming aspects and finding solutions to transform the business and address any poor performance.
- Generally the sooner a company seeks advice, the more likely it is that an achievable solution to any poor performance can be implemented.
Investigative Accounting Reports
- An independent third party is often best placed to identify problems without being caught up in a business’s day to day operations.
- We work alongside you to provide practical information that is easy to understand and implement as well as providing expert recommendations for your business going forward.
Our Tauranga Business Restructuring Team
BDO Tauranga has skilled and experienced recovery and insolvency experts across New Zealand.
Paul Manning and Kenneth Brown head up the BDO Tauranga team, supported by experienced insolvency staff. Paul and Kenneth know that clients appreciate honest and genuine support at times like these, and have a wide range of experience in dealing with insolvencies across all industries.
Paul and Kenneth are Chartered Accountants and Licensed Insolvency Practitioners of Restructuring, Insolvency and Turnaround Association of New Zealand (RITANZ) and Kenneth is a member of New Zealand Credit and Finance Institute.
Contact BDO Tauranga