SBR Success: A Snapshot

By Seth Cooper, Senior Insolvency Analyst

In the insolvency space, many formal appointments, such as liquidations and voluntary administrations, often end with the company’s deregistration. In most cases, that means the business closes permanently, employees lose their jobs, and creditors receive little or no return.

But SBRs are different; they help a company restructure its debt so it can keep trading and return to profitability with relief from legacy debt.
We are proud to have been appointed to 99 SBRs since inception, achieving an 85% success rate, which has saved companies a total of $21,398,219 and $18,648,137 in ATO debt alone. Through our work on SBRs, we have also recovered over $7,000,000 for the ATO.

It is likely that this money wouldn’t have been recovered if the various companies we worked with had entered into Liquidation instead of entering into the SBR.

In addition, these successful SBRs have also saved hundreds of jobs that almost certainly would have disappeared if the Companies had been liquidated.
It’s much more rewarding to see a company continue trading after struggling, and also to see money going back to the people who are owed it.

In liquidation, there are often few assets and limited recovery options, so creditors might get nothing. With an SBR, even though creditors agree to compromise their debts, they still receive money – on average, 30 cents in the dollar – where they might get no return in liquidation. Creditors also receive the benefit of keeping a customer and making profit from continued trade.