Will Safe Harbour Save Me?

Will Safe Harbour save me?

By Giles Woodgate

Woodgate & Co. Turnaround and Safe Harbour Advisors.

The Covid-19 virus has caused a crisis in the restaurant and catering trade.


Turnover is down – for some operators it has plummeted. Regardless of falling revenue, the rent, wages, the tax man and suppliers still have to be paid. Losses are mounting.

 

Do I have to call in the Liquidator or can my business be saved?

 

Safe Harbour became law in 2017 to help save businesses facing insolvency and to protect directors. Safe Harbour enables a business to restructure so that it can deal with its creditors with the assistance of an appropriately qualified expert advisor, thus allowing the business to continue operating.

When might you think about Safe Harbour? 

  • When you suspect or know that your business is insolvent. That’s when you know or an expert has told that you can’t pay your debts on time.
  • When your business has just gone through a catastrophic change. For example, a fall in patronage due to the fallout from Covid-19.
  • When, with a plan in mind, there is light at the end of the tunnel. Such a restructuring plan prepared with an expert advisor only has to demonstrate that the outcome is better than if you called in the Liquidator.
 
How do I start saving my business? Call in an expert advisor – a Safe Harbour specialist. The expert advisor will work with you to plan to save your business. The more you work with the expert advisor, the better the chance of survival.

What steps should happen? With your help, the expert advisor will:

 

– work out the financial position of the business.

– make sure that proper records are kept and tax reporting is maintained.

– prepared cash flow forecasts.

– contrast Restructuring v Liquidation outcomes.

– check that employee entitlements can be paid.

– monitor the better outcome test to maintain your protection.

 

 

Do I need to do anything? 

 

 

Picking up the telephone is the first step to making an informed decision about Safe Harbour. 

 

 

If the answer is “no”, you have made a rational positive decision. If the answer is “yes”, again that is a rational and positive decision for which help is on hand.