15.01.2021

Trading through financial difficulty

A recent Supreme Court decision has restated potential Director liabilities when continuing to trade a company that is in financial difficulty. This is a situation we see from time to time, particularly when external market events impact one of our clients or when we are referred a funding transaction that involves restructuring existing debt to help a company recover after a period of weak trading. 

In many cases, the company will trade on and return to a profitable and solvent financial position. However, there are risks that company Directors must carefully consider when trading in such circumstances. For an overview of how this decision impacts business read more here https://www.financenz.co.nz/news/trading-financial-difficulty-companies-act-1993