Restructured the debt of a cafe caterer by over 73% and saved $1.9 million

CONTRACTOR LABOUR HIRE – NATIONAL

$2.6 million

OWED TO CREDITORS

100%

EMPLOYEES RETAINED

73%

DEBT REDUCED BY

YES

CONTINUED TO TRADE

The financial situation:

This cafe and catering company in New South Wales had overall debt of $2.6 million, of which a significant portion was in arrears to the ATO, due to the impact of the COVID-19 pandemic and a negligent accountant. The business had received a payment default from the ATO and though they did not own their building had about $80k in assets.

The solution which reduced their debt by 73% and kept them trading:

After a consultation with AVA Advisory the client agreed that the best path forward would be to restructure their debt while the company kept trading. The company was then placed into voluntary administration and the DOCA was signed. The funds obtained from the finance arrangement were used to pay out creditors, a reduction in debt for the company of 73% – or over $1.9 million. The terms laid out in the DOCA were successful and the company managed to continue trading, even bringing in revenue of $27k a month whilst the VA was in process. We also implemented a restructure of the company to refocus the business on their core activities and enabled leaner and less complicated operations for smoother and more efficient financial dealings in the future. As an ongoing AVA Advisory client, the company is in a much stronger position to grow revenue while simultaneously managing potential risks.

Don’t Take Our Word For It…

We understand that when your business is in financial distress, you need advisors you can truly rely on. While we are confident in our ability to deliver results, we think these words from past clients speak volumes:

Jason M

AVA advisory met us in relation to a recent legal matter. They were able to explain to us what our options were and how we could achieve them. They kept our business alive and were able to reduce our debts from over $1,000,000 to under $200,000.

Jill H

“Andrew, (who I call my guardian Andrew) constantly reassured me and I felt we were in safe hands. He and his staff never sugar coated anything, told me the best and worst outcomes and was completely honest. Thanks to the team, we are part of the 30% of businesses that come out of an Administration with a business.”

John H

In a nutshell, AVA Advisory dragged us out of the mire and enabled us to continue to trade. AVA managed to reduce our debt which allowed us to save the business, save our employees jobs and entitlements and enabled us to trade on into a stronger position.

Let’s work together to achieve these kinds of positive outcomes for your business. Get in touch today to book your free consultation.