Take Advantage of Extended Insolvency Relief
In March this year, the Federal Government introduced new measures to provide relief from insolvency for people and businesses struggling as a result of the coronavirus outbreak. Our previous article and link to the full media release can be accessed here: https://www.valentilawyers.com.au/temporary-insolvency-relief-for-covid19/
The original sunset date for these measures to end was 28 September 2020.
The Prime Minister, on Monday, announced that the measures will be extended until 31 December 2020, in part to allow businesses a chance to grapple with and recover from the latest surges in cases in Victoria and New South Wales.
The economic outlook in Western Australia appears far brighter, with businesses being able to return to trading. However, the protections and relief still applies to companies and businesses based in WA.
As a short reminder, the relief package included:
~ Increasing the threshold for creditors to issue statutory demands and bankruptcy notices to $20,000;
~ Allowing 6 months for companies and individuals to comply with statutory demands and bankruptcy notice; and
~ Relieving directors from their duty to prevent the company from trading while insolvent for 6 months (releasing them from personal liability for debts incurred in the ordinary course of the company’s business)
While these protections are welcome by most businesses, it is important that if you are experiencing financial hardship, cash-flow issues, or questions about whether your business can meet its debts, that you take the time now to seek advice.
Seeking advice from restructuring and turnaround experts, early on, is the best way to give your business a chance to recover, if it has been hit hard by the pandemic and associated economic downturn.
At Valenti Lawyers, we are experienced in insolvency and restructuring, and have a number of strong relationships with accountants and insolvency practitioners who are prepared to meet with clients on a reduced-fee or no-fee basis to explore your options.
Please do not hesitate to reach out to us. We would be happy to discuss any concerns or queries you have in person, or by telephone or video conference.
Please note, these comments are general in nature and are not intended as legal advice.