Services - Risk Management
Safe Harbour
One of the key hurdles hindering a director’s willingness to take on financial risk has been their potential personal exposure for damages as a result of insolvent trading.
No one deliberately plans for corporate failure, but it does happen, and how we are reacting to it can determine whether the result is financial disaster or recovery.
Safe Harbour is an informal restructuring process that encourages directors of distressed companies to proactively address issues, whilst affording them a level of personal protection.
Safe Harbour should be viewed as a risk mitigation strategy, offering an additional level of support for directors during periods of rapid and significant change and for additional levels of protection for issues which may fall outside the scope of D&O policies.
In our experience, Safe Harbour is suited for businesses that have one or more of the following concerns:
- Cash flow shortages;
- Breach of debt covenants;
- Significant asset divestment programs;
- Demergers/ or distressed M&A activity;
- Raising further capital or accessing finance; and
- Considerable short-term debt maturities.
Safe Harbour is focused on achieving a better outcome for creditors, shareholders and other stakeholders than otherwise would be achieved if the company was forced to immediately wind up.
Eligibility
Directors can rely on the Safe Harbour process to absolve any personal liability if:
- Employee entitlements (including superannuation) are paid up to date;
- The company has maintained and lodged all notices and reporting obligations under tax law.
Legal Privilege
Our safe harbour programmes are operated through either the Board or Company legal advisers to ensure to the extent possible that legal professionalism is maintained.
Benefits of Safe Harbour
- Risk mitigation – engagement of Safe Harbour advisors affords a level of comfort to directors for personal liability during a restructure.
- Confidential – Safe harbour programmes are not required to be disclosed outside the Board. There is no disclosure requirement to the ASX and public markets. The programme works to protect company reputation and enterprise value.
- Supports turnaround & viability – Supports long-term organisational viability and value retention; and
- Control – The Board remains in control of the process with the support of experienced professionals.
How we can help
Olvera’s safe harbour programme has been used by a number of companies since its commenced to successfully manage their restructuring programme. Olvera prides itself on its client confidentiality.
Our services include:
- Preparation of review of client eligibility review;
- Development and delivering of the restructuring plan see Olvera Restructuring Services;
- Identification and agreement of key milestones in restructuring plan; and
- Board advisor and monitoring of milestones under the restructuring plan
