Background
Stephen Dixon of Hamilton Murphy Advisory was appointed as the restructuring practitioner for a Victorian based crane and crane labour hire company. At the time of his appointment, the company employed more than fifteen (15) staff across multiple construction sites throughout Victoria.
The business began to experience financial difficulties in 2023 when a several of its largest clients entered administration, leaving the company unable to recover debts exceeding $500,000. At a similar time, a significant project failed to pay for completed contracted works, triggering an expensive arbitration process. Despite proceedings, the company was still owed approximately $470,000 in unpaid services.
Our Solution
In conjunction with the Director of the company, accountant and management team, Hamilton Murphy Advisory introduced new procedures to enhance the monitoring of accounts receivable and revised the client payment terms. A solicitor was also engaged to review all new contracts, ensuring the inclusion of appropriate terms and conditions for both general hire and more specialised projects.
At the time of appointment, the creditors of the company totalled approximately $990,000. A restructuring plan was proposed to creditors, offering a return of twenty-six (26) cents in the dollar (c/$) to be paid over twelve (12) monthly instalments funded by future cash flow and trading profits.
The Results
The restructuring plan was accepted unanimously by the creditors of the company in late 2023. In late 2024, the company had satisfied its obligations under the restructuring plan, meeting the required contributions in full. The restructuring practitioner subsequently distributed a full and final dividend to creditors. The company has since returned to a solvent position and is now well-positioned to continue trading profitably into the future.
If you have any questions on insolvency or have a client that is currently facing financial difficulty please contact the Hamilton Murphy team by telephoning (03) 8866 7600 or via email to [email protected]