COVID 19 - SME Restructuring Plan
The Government is undertaking the most significant reforms to Australia’s insolvency framework in 30 years as part of its economic recovery plan to keep businesses in business and Australians in jobs.
Key elements of the reforms include:
- The introduction of a new debt restructuring process for incorporated businesses with liabilities of less than $1 million;
- Moving from a rigid one-size-fits-all “creditor in possession” model to a more flexible “debtor in possession” model which will allow eligible small businesses to restructure their existing debts while remaining in control of their business; and
- A rapid twenty business day period for the development of a restructuring plan by a small business restructuring practitioner, followed by fifteen business days for creditors to vote on the plan.
Whilst the Government is still working through the details of these reforms with our Professional Body ARITA (Australian Restructuring Insolvency & Turnaround Association), it is anticipated this new SME Restructuring Plan option will be available to Businesses from 1 January 2021.
Australia Business Rescue will be able to assist small to medium sized businesses take up the option of an SME Restructuring Plan when these reforms become legislation. Businesses that do not meet the criteria for an SME Restructuring Plan will be able to access other options to save their business. Please contact us to discuss your options