NEWS & INSIGHTS
Safe Harbour Advisory Services: Wexted Introduces Australia's First Structured Suite for Directors Navigating Financial Distress
When a director first suspects their company may be insolvent — or approaching insolvency — the decisions made in that window are among the most consequential.
Acting too slowly risks personal liability. Acting without structure risks the recovery itself. Safe Harbour, introduced through section 588GA of the Corporations Act 2001, exists precisely for this moment: to give directors the legal protection and operational space to pursue a genuine turnaround without the immediate threat of administration or liquidation.
But Safe Harbour protection is not automatic. It demands evidence, process, compliance and expert advice. For directors and their advisors, knowing what that support should look like and in what order has largely undefined — until now.
What Safe Harbour Advisory Actually Involves
Safe Harbour is a statutory defence, not a passive shield. To rely on it, directors must be able to demonstrate that — at the point they suspected insolvency — they began developing a course of action reasonably likely to lead to a better outcome for the company than the immediate appointment of an administrator or liquidator.
That standard, set out in section 588GA(1) of the Corporations Act, requires directors to remain actively engaged: informed about the company's financial position, compliant with core obligations, supported by appropriately qualified advisors, and implementing a restructuring plan that is evidence-based, realistic and continuously reviewed.
For directors, advisors and other intermediaries seeking a comprehensive grounding in the Safe Harbour framework — including the legislative requirements, eligibility preconditions and the director's obligations throughout the process — Wexted's Safe Harbour Guide provides that foundation in full.
A First for Australia — Wexted's Structured Suite of Safe Harbour Advisory Services
Advisory support for Safe Harbour has existed since the legislation was introduced in 2017. What has not existed — until now — is a structured, discrete and sequenced suite of services designed to map directly onto the Safe Harbour process and the legal standards it demands.
Wexted has developed five Safe Harbour advisory services, each addressing a specific stage of the director's journey through financial distress and recovery. These services can be engaged individually — where a director or their advisor has a specific and discrete need — or combined into a fully integrated recovery program that runs from initial solvency assessment through to post-restructure resilience planning.
The significance of this approach is practical as much as it is structural. Directors rarely arrive at Safe Harbour with a clean slate. Some need immediate solvency clarity. Others need to confirm eligibility before committing to a plan. Others are mid-restructure and require an independent assessment of whether their course of action still meets the "better outcome" threshold.
The modular design of Wexted's suite means that support can be deployed where it is needed, when it is needed — without requiring a full program engagement where one is not warranted.
For intermediaries — lawyers, accountants, brokers and other advisors referring directors to Safe Harbour support — the suite provides a clear framework for understanding what a well-structured engagement looks like and where their client sits within the process.
The Solvency Review
The starting point for any Safe Harbour engagement is an accurate and independent picture of where the company actually stands. Directors cannot develop a credible recovery strategy — or satisfy the evidentiary demands of section 588GA — without first establishing a factual basis for decision-making.
Wexted's Solvency Review provides an independent, rapid but rigorous assessment of a company's solvency position: its liquidity, creditor exposures, timing of obligations, and short-term cash runway. The output includes a 13-week rolling cashflow model, stress scenarios, and a clear preliminary recommendation on immediate stabilisation steps. For directors, this is the moment of clarity that Safe Harbour requires. For intermediaries, it provides the independent diagnostic that boards and lenders expect to see before any restructuring strategy is committed to paper.
The scope of the Solvency Review scales with the complexity of the business — from a single trading entity with straightforward cashflows through to multi-entity groups, leveraged businesses and ASX-listed companies requiring covenant testing and detailed intercompany forecasting.
The Eligibility Review
Safe Harbour protection is not available to every director in distress. Section 588GA(4) of the Corporations Act sets out a series of eligibility preconditions that must be satisfied before protection can apply — and maintained throughout the Safe Harbour period.
These include the timely payment of employee entitlements, substantial compliance with taxation lodgement obligations, and the absence of repeated material compliance failures in the preceding 12 months. They are not administrative formalities. They are substantive thresholds designed to confirm that the company is capable of meeting its most fundamental responsibilities — and that the directors seeking protection have been governing accordingly.
Wexted's Eligibility Review provides a focused compliance audit against these preconditions: reviewing payroll records, superannuation remittances, ATO lodgement history and recordkeeping systems, identifying any gaps, and producing a targeted remediation plan where issues are found.
Early verification of eligibility matters beyond legal compliance. A company that can demonstrate it has met its core obligations is better positioned with employees, financiers, regulators and prospective investors — creating the foundation on which more sophisticated restructuring initiatives can be built.
The Corporate Structuring Plan
Once eligibility is confirmed, directors must begin developing the course of action that Safe Harbour requires — a restructuring plan that is reasonably likely to lead to a better outcome than immediate administration or liquidation. In practice, this is where Safe Harbour either succeeds or fails.
Wexted’s Corporate Structuring Plan is a strategic operational and corporate redesign — addressing financial restructuring, operational efficiency, governance clarity, stakeholder engagement and, where relevant, multi-entity corporate structure — tailored to the specific circumstances of the company and the complexity of its recovery challenge.
Financial restructuring strategies addressed within the plan may include capital raising, refinancing, debt-for-equity transactions or asset realisation. Operational measures may include cost optimisation, rationalisation of loss-making divisions, supply chain restructuring or headcount rebalancing. For complex group structures, the plan may extend to intercompany funding redesign, asset separations and coordinated divestments.
The Corporate Structuring Plan is a living document — it must be updated as circumstances evolve and milestones are met or missed. Wexted's service provides the iterative framework to evaluate, develop and execute these measures in continuous alignment with Safe Harbour obligations and the long-term preservation of value.
The Better Outcome Test
At the legal heart of Safe Harbour sits a single, deceptively simple question: is the directors' chosen course of action reasonably likely to lead to a better outcome for the company than immediate administration or liquidation?
ASIC's Regulatory Guide 217 is clear that "reasonably likely" requires a rational, evidence-based case — not certainty, but not optimism either. Boards must be able to demonstrate why the chosen plan is commercially realistic, why it is superior to insolvency, and why the evidence supports that conclusion at the time the decision is made.
This is the function of Wexted's Better Outcome Test: a structured, documented assessment that produces the formal evidentiary basis for Safe Harbour entry and ongoing protection. The process involves detailed financial modelling of restructuring options, scenario and sensitivity analysis, creditor impact assessment, and a clear consolidated recommendation — prepared in a form that meets the expectations of the law and the scrutiny of a board, a liquidator or a court. This is a serious assessment that should always be conducted by an Appropriately Qualified Entity.
The Continuity Test
A successful Safe Harbour engagement does not end when the restructuring plan is implemented. Directors, boards and their advisors need confidence that the recovery is durable — that the structural, governance and financial changes made during the turnaround are embedded and resilient enough to withstand the pressures that follow.
Wexted's Continuity Test is a forward-looking resilience assessment designed to answer that question. It reviews the implemented restructuring measures and their operational effects, tests the business against a set of continuity scenarios — loss of a major customer, supply disruption, renewed liquidity pressure — and assesses the governance and compliance frameworks required to maintain oversight post-restructure.
The outputs include a residual risk register, a revised governance and reporting framework, and a 12 to 24 month resilience roadmap. For stakeholders — including lenders, investors and creditors — the Continuity Test provides independent assurance that the recovery is sustainable, not temporary.
For businesses outside of a formal Safe Harbour process, the Continuity Test also functions as a standalone stress-test — an opportunity to assess organisational resilience before distress, rather than after it.
Modular or Integrated — How the Services Work Together
Each of Wexted's five Safe Harbour advisory services is designed to stand alone. A director who needs immediate solvency clarity can engage the Solvency Review without committing to a broader program. A board that has already confirmed eligibility and begun developing a restructuring plan may require only the Better Outcome Test to satisfy the evidentiary demands of section 588GA. An intermediary whose client is approaching the end of a Safe Harbour period may need only the Continuity Test to confirm the recovery is on solid ground.
Where the full suite is engaged — from Solvency Review through to Continuity Test — Wexted coordinates the services as an integrated recovery program: sequenced, continuously updated, and producing the cumulative evidence record that a well-run Safe Harbour engagement demands.
In either form, the services share a common standard. Every output is prepared with the express purpose of meeting the law's expectations: board-ready, evidenceable, and structured to withstand scrutiny if the Safe Harbour position is ever tested.
Starting a Conversation with Wexted
Wexted is a recognised leader in Safe Harbour advisory across the ANZ region, with extensive experience supporting boards of ASX-listed companies, large private groups and complex multi-entity structures through every stage of the Safe Harbour process.
Wexted's team is available to provide rapid, confidential assessment and to help determine which services, in what form, are most appropriate to the circumstances at hand.
Published 2nd July 2026
By Wexted