In this Case Study, My Business Path stepped in to assist the business across a two year period. Through the Voluntary Administration process, a plan was devised that saw creditors paid the company continue trading and debt significantly reduced. Read how we made this happen.
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The Financial Situation
In this Case Study, this Rural WA independent supermarket came to My Business Path
- with an average annual turnover of around $10m including two commercial properties
- owing a total of $437,000 to unsecured creditors, including a tax debt of $312,000
- with creditors facing losing the entire loan property amount should the company go under
- receiving a Winding Up Application from the ATO
- facing enormous pressure from a major bank to sell not just their two commercial properties, but also the company owner's personal property to pay out their bank loan
My Business Path's role in relation to the business was to
- work alongside the company for a business turnaround
- place the company into Voluntary Administration
- negotiate with creditors to repay the debt across 12 months, reducing contributions to approximately $20,000 per month
My Business Path worked closely with the business to see
- debt reduced from $437,000 to approximately $240,000
- creditors made their money back with debts serviced
- business continue trading
- set up systems for a viable future
- cashflow remain unaffected with lower repayment amounts
Specific Points Of Note
My Business Path secured a stable, debt-free and profitable future for the business by
- facilitating negotiations with one of the company’s major suppliers who, it was discovered, had been overcharging for up to eight years
- recovering $1.05 million during the administration process through close examination of another of the company’s creditors
- working with the Financial Ombudsman Service to keep the major bank at bay for 12 months
- allowing for refinancing of the company property, leading to the client retaining ownership with no sale necessary
- successfully paying off up to $1 million of debt, including $437,000 owed to unsecured creditors.
Priority (employee) creditors were owed $45,000 and secured creditors $520,000.
The cost to the company was $240,000 through a result of negotiations.
After working closely with the business owners, My Business Path left the company in a far better financial situation than they were found. Following My Business Path's involvement, the ongoing structure and operations of the company were smoother and more financially capable than ever.
The people are real. The businesses are real. My Business Path designed a tailored solution that worked.
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