Gadens lawyers' Workouts and Restructure
Group provides unique solutions to business management and loan
The key objective of the Workouts and Restructure Group is to
provide solutions to difficult problems without resorting to
expensive and counter productive litigation.
The group was established following the 1989 economic collapse.
At that time our team worked successfully on a large number of
significant work outs for corporates, property companies, banks,
and other lenders.
Alternate Default Strategy
Gadens lawyers' Alternate Default Strategy
(ADS) is one of the group's most popular
solutions. It has already proved invaluable in minimising legal
costs, reducing disputes, and maximising returns for both lenders
A key element of an ADS plan is to harness the skills of the
borrower to maximise returns while giving lenders the comfort that
the lender's position is protected.
An important benefit of ADS is the advantageous GST position for
the mortgagee as demonstrated in the following example.
Where the mortgagor pays GST:
Net sale proceeds:
Where the mortgagee pays GST:
Net sale proceeds:
Less GST of 8% of $31m gross sales:
Amount to reduce debt:
The above example assumes GST paid on the margin method of 8% of
gross sales of $31m.
An additional $2.5m is available to reduce debt. Part of this
money could be paid to the mortgagor to encourage the mortgagor to
sell the properties voluntarily and to assist the lender
The implementation of this strategy requires careful planning as
the mortgagee will be liable for GST if it exercises control.
ADS enables a work out to proceed without:
formal default being called (thereby avoiding triggering cross
default and possibly triggering a domino effect)
the necessity to appoint a controller
triggering a liability for the lender for GST(and thereby
reducing the LVR by up to 10%)
wasting time and money on court actions.
t +61 2 9931 4927
t +61 2 9931 4926
t +61 7 3114 0250
t +61 7 3231 1567
t +61 3 9252 2581
t +61 3 9252 2531
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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