Harbour Masters - safe harbour & restructuring blog

Restructuring & Turnaround - what do these terms mean?

14-Dec-2017 09:58:00 / by Moira Carter posted in Safe Harbour, Better Outcome, Restructuring, Turnaround

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As covered in previous posts, the new Safe Harbour provisions were enacted to encourage directors to seek professional assistance in the early stages of a company’s financial distress (or foreshadowed distress), so as to seek a better outcome. The words usually brought up when mentioning positive outcomes for a financially distressed company are “restructuring” and “turnaround”. But what do these terms mean, what does a restructure encompass, what do we have to go through to “turnaround” a company?

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Down the Amazon to Retail Safe Harbour?

05-Dec-2017 12:13:37 / by Peter Krejci posted in Safe Harbour, Directors, Retail, Amazon

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With the official start date of Amazon Australia's operations locally being today, the reported fears and apprehensions of Australian retailers over the past decade have now been realised. As the media have built-up talk of the negative impact upon retailers, having seen Amazon's effect upon similar businesses in the US and the UK, we look ahead to the likely benefits to retailers set-up as companies in Australia using the Safe Harbour provisions in the Corporations Act.

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ARITA releases its Safe Harbour Guidance for Directors

23-Nov-2017 14:26:58 / by Moira Carter posted in Safe Harbour, Directors, Better Outcome, Plan, Guidance, ARITA, Qualified Adviser

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The Australian Restructuring Insolvency & Turnaround Association (ARITA) has released their one-page fact sheet on Safe Harbour for Company Directors, encouraging ARITA members to use this document for the promotion of their services. 

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What's a 'Better Outcome'?

15-Nov-2017 13:03:03 / by Peter Krejci posted in Safe Harbour, Better Outcome

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Safe Harbour laws effectively provide protection to directors from insolvent trading liability if they pursue a plan that is reasonably likely to achieve a better outcome than an immediate appointment of an Administrator or Liquidator.

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Directors' governance prerequisites

26-Oct-2017 17:06:55 / by Stefan Dopking posted in Safe Harbour, Directors, Governance

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Directors cannot claim safe harbour if, at the time the debt was incurred:

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Potential implications for Directors

18-Oct-2017 11:11:00 / by Stuart Otway posted in Safe Harbour, Directors

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In our opinion, the safe-harbour laws are best suited to circumstances where directors identify that their company is insolvent or likely to become insolvent at an early stage. This gives them the opportunity to develop a restructure plan that enables a director to rely on the safe harbour laws, in case the plan ultimately fails.

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Potential implications for creditors

03-Oct-2017 10:24:00 / by Stefan Dopking posted in Safe Harbour, Creditors

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There is no restriction on a creditor to start recovery action against the company and director (if a personal guarantee was provided). This might include applying for the winding up of the company during safe harbour. As part of the restructure plan, the company shall be required to manage creditor claims to avoid such recovery actions.

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Who will seek Safe Harbour?

28-Sep-2017 09:46:00 / by Stefan Dopking posted in Safe Harbour, Users

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While all directors may use safe harbour, it is more likely to be used by medium to large sized corporations.

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Safe Harbour - what is it?

15-Sep-2017 16:42:00 / by James Koutsoukos posted in Safe Harbour, Directors

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Under the Australian Corporations Act 2001 (Cth) Legislation (s.588G) a director has a duty to prevent their company continuing to trade whilst insolvent (“insolvent trading”).

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Key Steps of the Safe Harbour process

13-Sep-2017 14:20:00 / by Stefan Dopking posted in Safe Harbour, Process

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Directors who take up safe harbour will need to ensure that appropriate steps have been taken for the company to comply with its obligations. Here is a potential framework that could be used to document, implement and monitor the safe harbour process:

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