Retail business affected by natural disaster

• A retailer of recreational goods was impacted by the 2019/20 fires. The business sustained significant interruption as a result of customers not being able to visit the store for a period of 4-6 weeks during its peak trading period of Christmas and New Year.
• The loss of sales translated into trading losses whereby the company debts began to mount.

• What insurance was in place to cover such business interruption.
• What does the future hold of the business and will it be able to recover from the impact of the interruption.

In our free consultation we discussed the impact on the company’s financial position.
Based on this situation, a business turnaround management engagement was the most suitable option for the company. This involved:

• Preparation of a 3 way forecast, Balance Sheet, Profit & Loss and Cashflow to assess the ongoing sustainability of the business
• A review of the business insurance policy, formulation and submission of a claim, negotiating an outcome,
• Sale of the business as a going concern,
• Negotiating a settlement with secured creditors,
• Preparation and submission of a Compromise Application form to the ATO as a result of the hardship incurred.