Liquidation and restructuring of Ally Fashion
Liquidation and restructuring of Ally Fashion
| Client | Ally Fashion Pty Ltd |
| Industry | Retail |
| Services provided | Court-appointed liquidation, financial and operational review, cashflow management and turnaround advisory |
Key learnings
- Swift decision-making and expert guidance can save businesses in financial distress
- Navigating complex legal proceedings is sometimes necessary to achieve a successful restructure
- Working with experienced advisors is critical to managing legal and operational challenges effectively.
Our team was appointed by the Federal Court of Australia to support Ally Fashion Pty Ltd, a large retail business, following a breakdown in financial viability and governance.
The business experienced severe cash flow constraints, lacked internal controls, and operated a significant number of loss-making stores.
We provided business restructuring services, including:
- Court-appointed liquidation
- Voluntary administration and Deed of Company Arrangement (DOCA) implementation
- Financial and operational review
- Cashflow management
- Business recovery and turnaround advisory.
Strategy and restructuring path
We undertook a rapid assessment and implemented the following:
- Identifying and closing approximately 60 stores to stem financial losses
- Entering into a Licence Agreement to continue operating viable stores
- Negotiating a DOCA proposal and filed an urgent court application to transition from liquidators to voluntary administrators, allowing creditors to vote on the DOCA
- Reverting control of the company, with improved internal controls and reporting mechanisms.
Outcome
The successful implementation of the DOCA resulted in:
- Business continuity, with stores remaining open and jobs retained
- Priority creditors paid in full within three months of DOCA execution
- A more sustainable business structure.