A voidable transaction is a transfer of property or assets owned by the debtor to a third party that causes detriment to creditors. By voiding these transactions, a Trustee can recover assets that would otherwise have been available to creditors, ensuring an equitable distribution of assets to all creditors.

Under the Bankruptcy Act 1966, there are five primary transactions which may be voided by the Trustee. These include:

• Section 120: Undervalued transactions

• Section 121: Transactions to defeat creditors

• Section 121A: Transactions with consideration to third parties

• Section 122: Unfair Preferences

• Section 128B and C: Superannuation contributions made to defeat creditors

There is no strict definition of what informal restructuring is, however, quite simply it is the process of turning around the financial results of a business.

Unlike one of the formal restructuring processes set out in the Corporations Act (like scheme of arrangement, voluntary administration and deed of company arrangement, safe harbour or new small business restructuring process), the directors remain in control of the business whilst steps are taken to explore and implement a variety of strategies to return the business to a viable and sustainable operation.

The Company will often engage an external consultant to discuss the situation and seek guidance on the options available and how to implement same.

Some restructuring techniques might include:

• Divestment (e.g. sale of certain assets or parts of the business).

• Rationalisation of operations (e.g. costs, revenue, business processes, termination of non-performing contracts and employees etc.).

• Financing – refinancing of existing facilities, new debt or equity funding.

• Changing the legal structure.

WCT Advisory is a specialist financial advisory firm primarily concentrating on advising company directors and business owners when facing financial distress, as well as undertaking formal insolvency appointments. In addition to that primary focus, the firm also undertakes some corporate finance engagements including capital raising, due diligence and transaction advisory.

After 4 years, WCT Advisory now have offices in both Brisbane and Adelaide with three main service areas:

• Restructuring Advisory

• Insolvency

• Corporate Finance

Andrew Weatherley provided commentary on the Courier Mail and The Australian Articles by Glenn Norris and Chris Herde. In particularly the 23.5 per cent spike in company insolvency numbers over the past year in Queensland and the expectation of that continuing.

He also provided some commentary this afternoon to 4BC's Drive Program with Peter Gleeson around the increased insolvency numbers, some expectations for FY2023 and some simple advice for small business.

Brand protection is a critical aspect of any businesses operations as it ensures the long-term success and reputation of your company. Unfortunately, insolvency can pose significant challenges to brand integrity and sustainability – especially in the current climate of high interest and rocketing inflation.

Andrew Weatherley spoke on a recent podcast episode of Business Built Freedom, where he had a great chat with Joshua Lewis (Managing Director of Dorks Delivered) on business restructuring, cash flow, and working capital tips. 

Specifics covered include preparing a cash flow forecast, how to manage working capital, restructuring and mitigating risks.

This is the eighth in our series of articles at informing directors of their duties and options for small to medium enterprises if faced with insolvency. This particular article will deal with liquidations and the role of a liquidator.

A liquidator can be appointed by either a creditor (through a Court application) or voluntarily by members of the company. A liquidation can be either solvent (i.e. all liabilities are paid and there is a surplus for shareholders) or insolvent (i.e. when there are insufficient assets to pay all liabilities).

This is the seventh article in a series of articles aimed at informing directors of their duties, and the options available for small to medium enterprises (SME) if faced with insolvency or financial distress.

As a result of the COVID-19 pandemic and associated economic downturn, the Australian Government made changes to the insolvency framework with the aim of helping more small businesses restructure and survive that difficult period. The Small Business Restructuring (SBR) process is one of two new formal insolvency appointments introduced by the Federal Government in 2021. With the help of a registered liquidator (called a small business restructuring practitioner – SBRP), a company can put forward a plan to its creditors to restructure its existing debts, while allowing the directors to remain in control of the business, property, and affairs of the company during the restructuring period.

This is the sixth article in a series of articles aimed at informing directors of their duties and options for small to medium enterprises if faced with insolvency or financial distress. We now look at one of the more controversial mechanisms to restructure a business, being what is commonly referred to as a pre-pack transaction.

This is the fifth in a series of articles aimed at informing directors of their duties and options for small to medium enterprises if faced with insolvency. Following on from our previous article around the Director’s Penalty Notice, we now look at one of the distinct options to save a business, being a Voluntary Administration.

Article published in the Courier Mail Thursday, 15th September 2022.

WCT Advisory is delighted to announce the opening of their second office in Adelaide, South Australia with Virginia Lao to oversee operations.

Our restructuring and advisory team look forward the opportunity to now bring our expertise to the South Australian and Northern Territory markets.