When a severe storm caused the roof to collapse at a well known hospitality venue in February 2026, the business was forced to cease trading while safety assessments, remediation works, insurance issues and landlord matters were worked through. The extended closure placed significant pressure on revenue and cash flow, while fixed costs and creditor obligations continued to build.

Background

The venue being in a regional town was already beeing impacted by cost-of-living pressures, reduced consumer spending and softer regional tourism. The roof collapse compounded those issues, contributing to a total loss of income and creating solvency concerns. After discussions with the directors it was determined that a Small Business Restructure was a way to deal with the plight the company faced.

What AS Advisory did

AS Advisory worked with the director and the company’s external accountant to assess the viability of the business, investigate the company’s affairs and determine whether a Small Business Restructure was a better outcome than liquidation.

As part of the process, AS Advisory:

  • reviewed the company’s financial position and trading performance; 
  • assessed the likely return to creditors under both an SBR and liquidation scenario; 
  • reviewed potential recovery actions available in liquidation; 
  • considered the business’s turnaround plan, including reopening, repair works, marketing, cost control and staff training; 
  • prepared and issued the restructuring plan to creditors; and 
  • recommended the plan on the basis that it provided a greater, faster and more certain return than liquidation. 

A plan was devised where the director would make a contribution under the plan which would allow for a return to creditors within 2 months which was significantly higher than the estimated return that may have been available under a liquidation scenario.

The Outcome

The restructure provided a practical pathway to preserve value that may otherwise have been lost in liquidation. It offered creditors a materially better return, enabled a quicker distribution, and allowed the business to continue working towards recommencing trade.

Importantly, the plan also supported the continued employment of staff and gave the business an opportunity to reopen following completion of repairs. For the director, creditors, staff and the local community, the SBR created a controlled and commercial solution at a time when liquidation may have caused further damage.

Key takeaway

A Small Business Restructure can be an effective tool where a fundamentally viable business has been hit by an external shock. In this case, the SBR helped avoid a worse outcome, improved the expected return to creditors, and gave the business the breathing room needed to recover.