Companies at the tipping point

We have recently used the creditors’ voluntary liquidation (CVL) process as an effective way to close companies that had reached the end of their life and were unable to meet their liabilities. In some cases, the businesses were still trading when we were appointed.

Case Example

A long-established company faced declining revenue due to technological change and increased competition. All options were considered, including a sale, closure, or a combination of both. The directors entrusted the liquidator to manage the process and determine the best outcome for employees, creditors, and other stakeholders.

Why choose CVL?

CVL is a formal insolvency process often used when directors and shareholders decide that the company cannot, or soon will not be able to, pay its debts. It allows directors to transfer control to a liquidator, ensuring the process is handled independently and in compliance with the law. Importantly, it enables directors and shareholders to take the initiative rather than waiting for a forced liquidation.

Other options may also be appropriate depending on circumstances such as small business restructuring, voluntary administration, deeds of company arrangement, or recapitalisation. CVL can also be an effective response to director penalty notices issued by the Australian Taxation Office that requires appointment of a liquidator.

Levi Consulting

We regularly work with accountants and lawyers to guide clients through these decisions. In many cases, we have been appointed as liquidator with successful outcomes for all stakeholders.

When a business is potentially in financial distress, time matters. That’s why our first step is a triage call. A quick obligation-free discussion to understand the situation and outline the most appropriate path forward. We can ask a few questions to understand the current and future financial position, identify risks, assess whether the business is viable, explore the full range of options – formal and informal. It’s a smart first step. Often, it’s all a business owner or advisor needs to make an informed decision. Call David Levi 0418 602 466 for a confidential call.