Business as unusual: what directors need to know – Corporate/Commercial Law – Australia – Mondaq News Alerts
Australia: Business as unusual: what directors need to know
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In the latest edition of the Australian Institute of Company Directors publication, Company Director magazine, KordaMentha Partner Henriette Rothschild provides insights into proactive tools for directors in unusual and economically challenging environments. In the context of the Covid-19 pandemic, and with relief packages set to end, Henriette highlights the imperative for directors to act now.
Arguing against the stigma often associated with voluntary administration (VA), Henriette outlines just how important this tool can be. Calling on recent examples, she discusses how VA has proven a vital circuit-breaker for many organisations, including Kikki.K, Tigerlily, Harris Scarfe, Network 10 and Virgin Australia.
“Directors must be proactive, engaging with a restructuring expert to understand and consider options, maximising the chances of the organisation – or as much as possible of its operations – continuing to exist.”
In conjunction with VA, Henriette advocates the use of a well-structured deed of company arrangement (DOCA) as another sharp-edged tool offering time, flexibility, protection, contract renegotiation, footprint rationalisation and debt restructure options. She notes, “.prudent boards will consider all transformation tools available. to ensure the organisation survives and thrives.”
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