Disclaimer: While we’ve aimed to keep this post engaging, financial distress is no joke. The earlier you seek advice, the more options you’ll have. Delay rarely makes things better — unless we’re talking about fine wine or aged cheese.
Picture this.
A once-thriving chain of hospitality venues, buzzing with regulars, frothy cappuccinos, and the smell of banana bread, now sits eerily quiet. The register’s gone cold. Bills are stacked higher than the muffins. The business owner, worn thin from sleepless nights, finally makes the call that could change everything.
It’s decision time. Two pathways emerge:
- Emergency surgery: Voluntary Administration (VA)
- Outpatient rehab: Small Business Restructuring (SBR)
Which one’s right? That depends on the diagnosis.
Voluntary Administration: The Financial ICU
Think of VA as the emergency department for businesses in serious distress. VA provides a structured, court-free way to either turn around a failing business or wind it down with dignity.
When Levi Consulting steps in as Administrator, we take the wheel. The business owner gets a much-needed break. For many, this temporary handover is a relief. It removes emotion from decision-making and creates space for commercial logic to prevail.
The process is fast, deliberate, and highly structured:
- Day 1: Lodgement of statutory documents
- By Day 8: First creditors’ meeting where creditors may form a committee or vote to replace the Administrator
- By Day 25: Second creditors’ meeting where creditors vote on the way forward:
- Approve a Deed of Company Arrangement (DOCA)
- Opt for liquidation
- Hand back control to the directors
The Shield: During this time, legal protections kick in. Creditors can’t enforce claims. Suppliers can’t terminate contracts just because you’ve entered administration (thanks to ipso facto protections). This breathing space is often the lifeline businesses need.
Small Business Restructuring: The Outpatient Model
Not every business needs a stretcher and defibrillator. For eligible small companies (liabilities under $1 million), SBR offers a lower-cost, quicker, and more flexible solution.
The key difference? You stay in control.
SBR is a “debtor-in-possession” model. The directors continue to run the business day-to-day, while working with a registered Small Business Restructuring Practitioner (SBRP). It’s more “co-driver with a map” than “takeover by a surgeon.”
The SBR timeline is short and sharp:
- 20 business days: To prepare and propose a restructuring plan
- 15 business days after that: Creditors vote
- If approved, the plan is implemented, while you keep trading
Choosing the Right Path
It’s not just about size, it’s about strategy. Here’s a basic guide:
VA may be right if:
- Complex creditor negotiations are needed
- Independent leadership is required to rebuild trust
- Operational change is essential
- A business sale is on the cards
SBR may suit if:
- The business is fundamentally viable
- Management remains capable and engaged
- The debt is relatively straightforward
- You qualify under the $1 million liability cap
Where It Can All Lead
Under VA:
- A DOCA and a second chance
- A controlled liquidation
- Return to director control
Under SBR:
- A successful restructure and new lease on life
- A rejected plan which could tip the business into VA or liquidation
How We Help
At Levi Consulting, we’ve seen it all, from beloved family businesses in a slump, to fast-growing ventures hitting cashflow walls. Our role is to provide clarity, options, and leadership during crisis.
David Levi brings over three decades of experience to every engagement. Whether appointed as Voluntary Administrator or Small Business Restructuring Practitioner, he’s focused on practical, commercial outcomes.
Final Thought: Don’t Wait
If you’re feeling the financial pressure, or advising someone who is, don’t delay the conversation. The sooner you act, the more breathing room you’ll have to choose a better outcome.
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