Sydney, 26 July 2021: The impact of sustained uncertain economic conditions due to COVID-19 will force many companies to restructure their businesses to remain viable, while giving others an opportunity to transform their operations through strategic restructures and emerge even stronger.
This is the view of Clayton Utz partner and National Practice Group Leader for Restructuring and Insolvency (R&I), Timothy Sackar - recently named in Australasian Lawyer's inaugural list of Most Influential Lawyers (Business Category). With a reputation as one of the country's leading lawyers in business restructuring, distressed investing and insolvency, Timothy is one of only 37 members of the legal profession singled out as having "set the bar for their peers in a trying year rife with new challenges".
Timothy said the financial and operational turmoil felt by the business community in 2020 was far from at an end - with no clear end in sight. "The impacts being felt by extended lockdowns and ongoing COVID-19 restrictions mean that effective business restructuring strategies are incredibly relevant at the moment for surviving the current trading environment. As our R&I team highlighted in our 2020 edition of From Red to Black, these current conditions present a unique opportunity for businesses to take stock and, with appropriate support, effect a successful restructure," said Timothy.
The current volatility in the market will also create opportunities for some investors and alternate capital providers, which should be welcomed. "This growing part of the market can only provide more options for corporate Australia. In that context, investors and financiers also need to carefully consider their restructuring strategies - managing risk is as much about entry into the deal as it is planning for the exit from the investment and making sure you get the right advice during the intervening period."
Timothy led the Clayton Utz team that advised Deloitte as administrators on the successful restructure and sale of Virgin Australia Limited to Bain Capital - one of the most complex and challenging administrations in Australia's corporate and aviation history. The transaction involved a level of innovation not seen before in Australia, which Timothy said was likely to be a feature of future control transactions.
"The successful restructure and sale of Virgin Australia was made possible with the assistance of the current Australian corporate insolvency law, which provides an effective set of tools to assist both companies and financiers facing distressed situations," he said. "Even without further reform, the framework and regimes provided under the Corporations Act work well in the Australian financial landscape, with the restructure of Virgin being a great example."