SAFE HARBOUR GUIDE
Download the Safe Harbour Guide from Wexted. It delivers a comprehensive overview of Safe Harbour; including what it is, when it applies, and how it can protect directors during periods of financial uncertainty.
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GIVING BUSINESSES TIME TO RECOVER
In the most challenging moments, Safe Harbour gives companies and directors the time to develop a viable recovery strategy without the immediate appointment of an administrator or liquidator. As the pre-eminent provider of Safe Harbour advisory services in the ANZ region — Wexted is on hand to develop and implement a robust turnaround plan designed to address the Better Outcome test and prevent the threat of insolvency.
Wexted’s Safe Harbour services and resources are designed to support all stakeholders, including directors, accountants, lawyers, brokers and other advisors.
Services
Wexted provides a comprehensive suite of Safe Harbour advisory services, supporting directors throughout the turnaround process. These services may be engaged individually or combined into an integrated recovery program, leveraging Wexted’s pre‑eminent Safe Harbour expertise.
THE SOLVENCY REVIEW
An independent rigorous assessment of a company’s solvency position — including liquidity, exposures, timing of creditor demands, and short-term cash runways.
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THE ELIGIBILITY REVIEW
A focused compliance assessment against the statutory preconditions for Safe Harbour protection set out in section 588GA(4) of the Corporations Act.
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THE CORPORATE STRUCTURING PLAN
A strategic review and redesign of a company’s operational and corporate structure to support financial stability, governance clarity and long-term recovery.
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THE BETTER OUTCOME TEST
A structured assessment to determine whether a course of action is reasonably likely to lead to a better outcome rather than immediate administration or liquidation.
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THE CONTINUITY TEST
A resilience assessment designed to confirm whether a company can maintain compliance, cash-flow stability and operational continuity following Safe Harbour.
Learn moreCOMING SOON: WEXTED'S SAFE HARBOUR EVALUATION TOOL
The complimentary tool will offer directors and appropriate stakeholders a confidential and structured way to assess and understand Safe Harbour protection — before making critical decisions.
WEXTED SAFE HARBOUR EXPERTS
Wexted has been trusted to deliver crucial Restructuring & Turnaround services to significant public and privately listed companies.
LATEST VIDEOS
Genevieve Sexton: Safe Harbour and are we making a difference?
RESOURCES
SAFE HARBOUR RESOURCE CENTRE
Access our complete database of reports, records, codes and checklists in relation to Safe Harbour.
CLICK HERESafe harbour news & Insights
Discover the latest insights and developments across the corporate restructuring landscape relating to Safe Harbour including The Turnaround: our newsletter, podcast, and webinar series.
the turnaround podcast: sophie ulhorn & andrew vincent - putting on someone else's brand
How do partners in growing professional services firms strike the balance between firm reputation and personal brand? in this episode, hamilton locke’s sophie ulhorn and andrew vincent share their experiences in building trust, shaping their own professional narratives, and aligning with their firm’s brand to drive sustainable growth.
spotlight on projects: wexted continue active safe harbour presence
Following our ‘safe harbour edition’ of the turnaround in august, we outline some of recent instances and sectors where we have assisted with the safe harbour defence and detail our role.
looking over the cliff: the better outcome in safe harbour
When the safe harbour is ultimately tested, what is ‘reasonably likely’ to be a better outcome will be subject to significant scrutiny. how much does the aqe need to do, and what is the importance of medium and long-range modelling to ensure going concern and sustainability? what shape does the counterfactual assessment take, and what have our experiences told us is necessary?
same, same, different: appropriately qualified entities (aqes) in safe harbour
As companies increasingly turn to the safe harbour provisions under section 588ga of the corporations act 2001, the role of the appropriately qualified entity (aqe) is gaining prominence. one of the issues of contention in the safe harbour panel review was the identity of the advisors, and their ‘appropriateness’ to undertake that task. what are the range of factors a board - or their advisors - should consider in seeking an aqe who will be regarded as ‘appropriate’?
the turnaround podcast: genevieve sexton — safe harbour and are we making a difference?
In this episode of the turnaround, we sit down with genevieve sexton, chair of the safe harbour review panel, to explore the evolution of australia’s safe harbour regime. genevieve shares insights from the 2021 review — from navigating a wide spectrum of submissions to shaping key recommendations and pushing for meaningful reform. we discuss the role of safe harbour as a governance tool, the changing mindset of company boards, and whether the law is delivering the impact it promised.
SAFE HARBOUR EXPERIENCE
Wexted has extensive Safe Harbour public and private experience — across all industries. Due to the sensitive nature of Safe Harbour and confidentiality — projects are somewhat general in nature.
project lanigan
Safe harbour advisors to asx listed finance company facing liquidity issues due to covid-19.
project craig - safe harbour advisors
Safe harbour advisor to a significant state infrastructure project.
project fitzroy - safe harbour advisors
Safe harbour advisors to asx listed insurance company negatively impacted by the hayne royal commission.
project george - safe harbour advisors
Safe harbour advisors to a significant private company operating in the civil engineering construction sector, providing professional services on renewable technology projects.
project ivy - safe harbour advisors
We were engaged as safe harbour advisor to a disruptive technology and next gen business in the fast-moving consumer goods sector. the company had been unsuccessful in a proposed capital raise.
FREQUENTLY ASKED QUESTIONS
What is Safe Harbour?
The Safe Harbour legislation is set out in section 588GA of the Corporations Act 2001 (the Act) and was introduced in September 2017. It provides a Director ‘breathing space’ to formulate and implement a restructuring plan, preserving the business to avoid the need to enter into administration whilst protecting against personal liability from insolvent trading if the plan is unsuccessful.
When does a company use Safe Harbour?
Safe Harbour is a process that protects Directors. Directors use the Safe Harbour regime when a Company is experiencing financial distress or uncertainty, and they have started to suspect the company may become, or may be, insolvent.
Who engages the safe harbour Advisor?
As Safe Harbour is a defence for the benefit of Directors, the Directors typically engage the Safe Harbour Advisor, but (as the Directors will have the benefit of an indemnity from the Company) costs are usually paid by the Company in question. The day to day engagement is usually with senior management.
What does Safe Harbour do?
Safe Harbour means the insolvent trading provisions do not apply to a Director if, at a particular time after they suspect insolvency, the Director starts developing “courses of action” that are likely to lead to a “better outcome” for the company than the immediate appointment of an administrator or liquidator.
What does Safe Harbour protect?
Directors that successfully rely on the safe harbour defence will not be held personally liable for any debts incurred directly or indirectly in connection with a course of action developed to achieve a better outcome.
What does ‘Course of Action’ actually mean?
The ’Course of Action’ is usually a restructuring plan. If that plan is implemented, and the plan is likely to lead to a better outcome for the company and creditors as a whole than an immediate administration, then the Directors will have a statutory defence to an insolvent trading claim made by a liquidator. As such, the Safe Harbour is designed to provide comfort that a plan can be implemented without insolvency risk, providing an incentive for restructuring.
What sort of things are in a restructuring plan?
The restructuring plan (Wexted call this a Corporate Structuring Plan) can include operational, financial and governance initiatives such as raising equity/debt capital to refinance/ deal with secured or unsecured debts; M&A initiatives such as sale of non-strategic assets or underperforming divisions; redundancy and cost cutting initiatives; and settlement of significant contingent liabilities.
What does the Plan need to look like?
The Corporate Structuring Plan can be flexible but, if it is tested, it needs to meet certain criteria. Debts must be properly incurred to support the plan. The plan needs to be implemented within a reasonable timeframe, and it must be realistic and not fanciful.
Are there conditions to obtaining the protection?
The Director has the burden of proving a course of action is ‘reasonably likely to lead to a better outcome’. The company must pay its employees and meet its tax reporting obligations. The Directors need to keep themselves informed about the financial position of the company, prevent misconduct, ensure the company maintains financial records, and have regard to advice from ‘an appropriately qualified adviser’.
What is an appropriately qualified advisor?
While a Director must have regard to advice from an appropriately qualified advisor (or advisors), there is no specific requirement for that person to have specific qualifications. Wexted’s view is that aspects of Safe Harbour protection, such as the determination of a better outcome, should ideally involve a restructuring professional or registered liquidator. Other aspects of Safe Harbour advice can quite competently be undertaken by individuals suited to the circumstances of the course of action, such as lawyers, investment bankers, governance professionals or engineers/ industry experts.
DO YOU HAVE A QUESTION?
PARTNERING WITH WEXTED FOR SAFE HARBOUR PLANNING & ACTION
When organisations face extreme challenges that are not yet fatal — Safe Harbour should be the first port of call.As a Safe Harbour authority, let Wexted support directors and management, utilising the Safe Harbour framework to deliver a complete redemptive restructuring solution; from initial submissions to plan implementation.Start a conversation with Wexted today.
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