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Project S – Safe Harbour Case Study

Recently completed Safe Harbour appointment of a packaging company which concluded in the Company going into Voluntary Administration after a 12-month engagement.  Here are the details.

The Safe Harbour engagement was for 12 months, commencing in May 2023 and concluding when voluntary administrators were appointed in May 2024. 

Reasons for the Engagement

The relevant entity was a public company with three directors on the board.  For approximately 18 months prior to appointing GM Advisory (GMA), the board had been proactively implementing many of the elements required to satisfy the existence of Safe Harbour.  This was a commendable action by a board of directors not overly familiar with all aspects of corporate governance, particularly in relation to the implications of a company trading near or in the zone of insolvency.  A review by the company’s solicitor resulted in advice that the Safe Harbour lacked guidance from an appropriately qualified entity (AQE) resulted in GMA’s appointment.

What Happened

Regular board meetings identified that the board was completely across the Company’s cashflow and that it could meet its debts as and when they fell due.  Whilst shareholders were canvassed for ongoing support; the directors engaged an agent to seek out merger and acquisition opportunities.  This strategy formed the basis of the better outcome plan and was for a finite period due to the willingness of existing shareholders to continue funding operations.  Funding ceased and the board appointed administrators who are looking to sell the Intellectual Property of the company to the parties identified during the Safe Harbour period.

Final Words – From the Directors

Dear Ginette & James – thanks for all the work you have done here.  I feel we did all we could and would not have kept trying to find a deal if we weren’t in Safe Harbour.  Hopefully one of the potentials we sourced will deliver for the Administrator/shareholders.