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Safe Harbour

Expert Safe Harbour guidance for directors and stakeholders

When times are tough but not yet terminal, the Safe Harbour regime can help companies avoid formal insolvency procedures. Deloitte combines deep experience in assisting directors who choose this route with our extensive restructuring expertise to deliver guidance that adds value for all stakeholders.

Company directors seeking to save a business in financial distress without entering voluntary administration face two main risks: breaching their duties as a director and incurring personal liability for insolvent trading if the turnaround efforts fail.

Taking advantage of the Safe Harbour provisions set out in Section 558G of the Corporations Act 2001 can both protect directors from these risks and help preserve enterprise value. The regime can give directors the breathing space they need to move a business towards recovery instead of entering into a formal insolvency.

Our restructuring advisors offer expert advice to help directors evaluate their options in this situation. We draw on significant experience leading many complex Safe Harbour assignments for clients all around Australia, as we guide directors towards optimal outcomes.


Our approach

The Safe Harbour provisions only apply under certain circumstances and are subject to compliance with tax reporting and employee entitlement obligations, among other things.

Directors must develop and implement recovery plans, then continuously review and evaluate these against the expectation set out in the eligibility criteria that the plan will lead to a better outcome for the company. If directors can’t demonstrate this, the Safe Harbour arrangement ends, and a formal insolvency process must begin.

In addition, the time taken between considering what should be done and going ahead and doing it is not limitless. Safe Harbour will only protect directors during “a reasonable period” between the consideration of the various courses of action and their implementation.

Our specialist advisors work closely with clients to cut through the complexities. We provide detailed advice and guidance on whether a company can meet the Safe Harbour eligibility criteria and stay compliant with the legislative requirements. We also deliver hands-on implementation support to companies that pursue this course, managing issues as they arise.

We have a successful track record of helping companies use Safe Harbour provisions in ways that can preserve value for directors and all stakeholders.

Download our brochure to learn more