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ARTICLE · 31 OCTOBER 2020

Success story: Settling a lease debt to avoid liquidation

Pearce & Heers
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Many businesses suffer financial difficulty during their lease, for various reasons such as the COVID-19 pandemic.

AustraliaInsolvency/Bankruptcy/Re-Structuring
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We were recently referred a client who we helped settle a lease debt to avoid liquidation. This is how.

Many businesses suffer financial difficulty during the period of their lease for various reasons including the current COVID-19 pandemic. Whilst directors of companies with lease debts may consider liquidation, this comes with other risks such as risks of personal guarantees or losing the rental bond.

For a company with a lease debt or un-manageable future lease obligations, as long as there are not significant other creditors, we will generally suggest that attempts be made to settle the lease debt or reduce future required lease payments. And we have helped many businesses negotiate settlements of their lease obligations over the years.

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