Quick Snapshot
- Industry: Retail (School Uniform Manufacturing)
- Location: Victoria
- Total Debt: $165K (ATO) + $461K (secured NAB loan)
- Outcome: All debts resolved, no personal exposure, retirement achieved
The Situation
A Victorian-based school uniform manufacturing business approached de Jonge Read® following a sustained decline in revenue.
During the compulsory COVID lockdowns, school closures resulted in an immediate loss of demand. Turnover fell to zero, and while restrictions later eased, revenue did not return to sustainable levels.
The business remained under ongoing financial pressure.
The Problem
As trading conditions failed to recover:
- The business accumulated $165,000 in ATO debt
- A $461,000 secured loan with NAB remained outstanding, secured against an investment property
- Ongoing overheads and equipment holding costs continued
The directors were nearing retirement and determined that continuing to trade was no longer viable.
The Solution: de Jonge Read®’s Expertise
We implemented a controlled business exit and liquidation strategy.
This involved:
- Setting a clear shutdown date
- Realising all business assets, with proceeds applied toward the NAB secured loan
- Placing the company into liquidation to address the ATO debt
- Managing the sale of the investment property to finalise the remaining secured liability
The Outcome
The structured exit allowed all liabilities to be addressed while preserving the directors’ personal position.
Key results:
- $165,000 in ATO debt resolved
- $461,000 secured NAB debt finalised
- All business assets realised without complication
- No personal exposure remained
- Surplus funds retained for retirement
The process was completed in a controlled and orderly manner, allowing the directors to transition into retirement.
Key Lesson
When a business is no longer viable, a structured and controlled exit can provide a clear pathway to resolve debt and protect personal assets.
Early planning allows directors to manage liabilities, avoid unnecessary risk, and transition with certainty.
If you have clients considering closing their business or approaching retirement with outstanding debt, we can help map out the right exit strategy to protect their position and achieve a clean outcome.
This case highlights how retail businesses in Victoria impacted by revenue loss due to uncontrollable events can use a controlled exit and liquidation strategy to resolve ATO and secured debt while protecting retirement outcomes.
Should you have clients or associates that you know are struggling with financial issues or need assistance in reviewing their business affairs in preparation for what’s around the corner, our team of Strategists would be pleased to discuss options that are available on how to best design and implement insolvency strategies. Contact us now on p. 1300 765 080 | ua.mo1777377987c.arj1777377987d@ofn1777377987i1777377987
Did you know?
Phoenixing is another name of business restructure. Read more about business restructures and when this can be an option for you.
