5 insights from an Australian insolvency veteran

RSM - providing person insolvency, bankruptcy and corporate insolvency solutions
RSM - providing person insolvency, bankruptcy and corporate insolvency solutions

David Kerr, RSM Partner in the Restructuring and Recovery division, has witnessed plenty of change since beginning his career in accounting in the early 1980’s.

Right now, he is focussed on supporting people to explore their financial options, and navigating them through the personal or corporate insolvency process, if that’s the determined outcome.

This month the Restructuring and Recovery team puts the spotlight on David, who is based in Sydney, NSW. We asked him to share five insolvency insights he has gained from decades in the profession.

page-1.jpgLeading-up to insolvency, typically debts are mounting, cash flow has dried up and creditors are chasing repayments.Insolvency helps restore order

Leading-up to insolvency, typically debts are mounting, cash flow has dried up and creditors are chasing repayments.
For most people, it’s a chaotic and stressful time that can feel like it’s out of control. Formal insolvency processes help restore order.

Options are considered, a formal process begins with the right professional advice. The debtors typically stop calling individuals and an ordered sequence of events is set out where we seek to gain the best outcome for everyone involved, including the creditors of the financially distressed.

People tend to feel a great sense of relief that the matter is being dealt with professionally - and that to some extent, it becomes out of their hands. We help to restore order in a turbulent time and draw a line in the sand.” David Kerr said.

page-3.jpgThe last major insolvency reforms were in the 1990s.Earlier advice usually means more options are available

People who are in business tend to be optimists - so that means when things aren’t tracking well, they may often delay reaching out for advice, hoping things may improve.

Typically Insolvency Practitioners are engaged when financial matters are escalating rapidly or are already out of control. I’d like to see that change; for people to investigate their options earlier in the financial distress process.

Being proactive usually means a better outcome for everyone involved; something that is already a problem - doesn‘t become a bigger one.

page-4.jpgBeing honest and upfront is critical

The last major insolvency reforms were in the 1990s.

I always play with a straight bat. I don’t sugar-coat the situation or set unrealistic expectations. I look at the facts and put informed, professional options on the table for consideration.

We are working with numbers and legalities, but every scenario is ultimately about people. Business owners or directors and their families, people in the supply chain who haven’t been paid, employees who may be out of a job. It’s critically important to be transparent, upfront, and informed about the best options available in each individual situation,” David said.

page-2.jpgAsk a professional: there is no such thing as a silly question

I’ve had plenty of clients who may feel embarrassed to have to ask for help or seek further clarification - but of course, there is no need to feel that any question is a silly question.


Here to help you explore your options

Do you or your clients need insolvency support or just want to understand the options available to you? Free, initial phone consultations are available. Find out more or call 1300 263 816.