• NDIS Business

Case Study: Sophie’s NDIS Companies – Complex Restructuring, Liquidation, and Bankruptcy

The Situation:

Sophie came to LemonAide with multiple NDIS companies in financial distress, owing money to secured creditors and the ATO.

The Challenges:

  • Creditors statutory demand from the ATO for $987,175.95 against one company
  • Total ATO debt exceeding $2 million across three companies
  • Personal guarantees on secured creditor loans exceeding $300,000
  • Directors owing money to each of the companies totalling $751,564.36
  • Unresponsive co-director (Linda) who may have left the country
  • $85,000 of company funds used to purchase another company

LemonAide’s Approach:

  • Assessed the viability of the businesses without debt
  • Restructured Sophie’s businesses into new Pty Ltd companies
  • Ensured funds were returned to the company being liquidated
  • Introduced Sophie to a lawyer to sue her own companies for outstanding amounts
  • Properly valued and sold Sophie’s property equity to her husband Matt
  • Guided Sophie through personal bankruptcy process

The Outcome:

  • Businesses restructured with Sophie’s husband Matt at the helm and Sophie as manager
  • Companies now debt-free and profitable, with turnovers exceeding $801,427.14 and $129,135.36 respectively
  • All company BAS’s and suppliers paid on time with monthly profits generated
  • Sophie and Matt continue to live in their home
  • Sophie discharged over $2.3 million of debt through bankruptcy
  • Preserved the core business operations and assets

Key Takeaways:

  • Complex business structures require comprehensive restructuring strategies
  • Personal guarantees can lead to significant personal liability
  • Proper restructuring can preserve valuable business operations
  • Bankruptcy can provide a fresh start when personal debts are insurmountable

Facing complex business and personal debt issues?