Background
The business operated as a national retail chain with both physical stores and online sales and had been experiencing declining performance across its locations. Prior to the engagement, the business was consistently underperforming management’s forecasts due to reduced consumer demand and increasing competition.
Simon was engaged as a Safe Harbour adviser to assess the company’s financial position and explore potential courses of action. It was determined that pursuing a sale of the business (negotiations were already underway), followed by voluntary administration and a proposed Deed of Company Arrangement (DOCA), was expected to deliver a better outcome for creditors than liquidation.
Throughout the process, Simon provided strategic guidance to the board, ensuring the company remained eligible for Safe Harbour protection, that the terms of the sale optimise value for the company, and the DOCA was appropriately structured. Simon also maintained strong engagement with the secured creditor, securing their support throughout the process.
During the engagement, the company managed costs and supplier relationships to continue trading while negotiations were finalised, positioning the business to deliver a stronger return to creditors than under a liquidation scenario. Upon execution of the Business Sale Agreement, the company entered voluntary administration, with a DOCA intended to be proposed subject to completion of the sale, ultimately delivering a better outcome for employees and both secured and unsecured creditors.
How did we assist?
- Appointed as Safe Harbour adviser to support directors while significant underperformance continued.
- Assessed financial position, restructuring options and likely creditor outcomes.
- Supported negotiations already underway for a potential business sale.
- Ensured Safe Harbour eligibility and compliance throughout restructuring.
- Provided strategic guidance on structuring the DOCA to optimise creditor outcomes.
- Maintained strong engagement with secured creditors to retain their support.
- Managed trading performance and supplier relationships during transition.
OutcomeThe business was guided through a structured sale process followed by voluntary administration with a proposed Deed of Company Arrangement designed to deliver materially better outcomes than liquidation. The engagement stabilised operations, preserved value and created a pathway for improved returns to both secured and unsecured creditors.
