Business Recovery & Insolvency Management

The borrowing of money to further the establishment and running of businesses is central to most modern commercial activity. That lenders will not always recover all funds owing to them is both a risk and a certainty of the finance industry. At any stage of the economic cycle a significant number of businesses will fail – and at a certain stage this number will dramatically increase.

Naylor Lawrence & Associates Limited’s business recovery and insolvency management team have the experience and expertise to assist lenders to protect and recover their loans or to assist small to medium sized enterprise business owners to recover their losses or conduct an orderly liquidation of their business. The key to avoiding insolvency is to seek professional help as soon as the first signs of trouble appear.  The rewards for early action are great.

The Insolvency Law Reform Bill, which is expected to be passed into law during 2006, will introduce to New Zealand a Voluntary Administration (VA) regime similar to the one used in Australia.  One of the key features of this regime is the encouragement it provides for companies to seek help early.  The new legislation will focus on business recovery ahead of insolvency management.

Receivership

Receivership generally entails an appointment by a debenture holder who is primarily interested only in recovering his investment.  In some cases the debenture is refinanced and the business improves sufficiently to continue to operate.

Liquidation

If, however, the business is unable to continue to operate, or it is deemed at the outset there is no viable future for it, a liquidation may be necessary.  The liquidator disposes of all the assets of the company and repays creditors as much as he can.  Upon liquidation the company ceases to exist.

Solvent Company Liquidation

Some solvent companies simply cease to operate and need to be wound up.  This process often requires a formal liquidation to avoid certain taxation consequences.  The liquidation is generally straight forward and can be completed reasonably quickly by our experienced staff.

Business Recovery / Business Turnaround

Early action, encouraged by the new Voluntary Administration Regime, will result in more business recovery / business turnaround opportunities for businesses.  The recovery is not guaranteed, but there is a greater chance of it than waiting until the “horse has bolted”.

For assistance in dealing with business recovery and insolvency management services contact John Naylor.

 

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