Date posted: 23/04/2020

Guidance for New Zealand companies in financial distress

NZ Members in public practice helping companies in financial distress.

In Brief

  • RITANZ with the support of Chartered Accountants ANZ has published a special guide for accountants in public practice
  • This guidance outlines some of the options available as part of the insolvent trading relief measures. Be careful about who you turn to for specialised advice

Businesses in New Zealand are facing challenging times and, as accountants, you will have clients coming to you seeking advice and looking for options in relation to various levels of financial distress, either current or expected.

To help Chartered Accountants, the Restructuring Insolvency and Turnaround Association New Zealand (RITANZ) and Chartered Accountants ANZ have published this guide. It outlines some of the options available as part of the relief measures introduced by the New Zealand Government around insolvent trading laws in the Companies Act 1993. These include the temporary safe harbour protection and the business debt hibernation scheme.

The guide also highlights the importance of only dealing with an Accredited Insolvency Practitioner listed on the RITANZ or CA ANZ websites. Choosing the right person to assist your client in these difficult times is a critical decision. It is important that your clients are placed in the hands of an experienced practitioner, not just for themselves but also to ensure that you fulfil your own obligations as a professional advisor, particularly given the financial stress the clients may find themselves in.

The five page guide also outlines the next steps if the temporary relief options can’t save the business as well as support available for those affected emotionally. This includes special access to the Employee Assistance Program (EAP) for Australian and New Zealand members of CA ANZ during the COVID-19 pandemic. This confidential program supports you and members of your family through counselling services and can be accessed 24 hours, seven days a week. As a member of CA ANZ, up to three sessions are provided free of charge. EAP services provide short term, early intervention and solution-focussed support from independent professionals, such as counsellors and psychologists.

To find an Accredited Insolvency Practitioner refer to the Find a CA tool on the CA ANZ website or the lookup tool on the RITANZ website.