An insolvency option depends on equipment the company does not own

The recovery model assumes the machines stay

A hypothetical company's recovery forecast includes income from a workshop that uses leased equipment. The director treats the machines as company assets because they have been on site for years. Before comparing insolvency options, identify ownership and access arrangements. A forecast cannot establish that the business will retain the equipment needed to deliver its projected work.

Map the equipment that drives revenue

List the essential machines, vehicles and systems beside the jobs that depend on them. Record the apparent owner and supporting agreement, rather than relying solely on an asset register label. Include equipment supplied by related parties. Mark ownership or access questions as unresolved until the relevant documents have been checked by the adviser.

Take the uncertainty into the options discussion

ASIC's director guidance stresses keeping informed about the company's financial position and seeking advice when financial difficulty arises. Give the insolvency adviser the equipment list and agreements when discussing available options. Do not assume an appointment automatically preserves or ends every right to use equipment; the actual arrangement and applicable rules require assessment.

Source: ASIC: Insolvency for directors

Price the operational alternatives

In the hypothetical example, the workshop has no equivalent replacement machine available immediately. Estimate the practical effect of delayed access using supplier information: replacement availability, transport, installation and work that could not proceed. Label these as planning assumptions. Do not promise customers a completion date based on equipment whose continued availability has not been established.

Separate ownership from purchase proposals

If somebody proposes buying equipment as part of a recovery, ask who would sell it, who would pay and what approvals or restrictions need review. Do not transfer assets or sign new commitments from a preliminary discussion. Keep any proposed transaction distinct from the present ownership and access position so the comparison remains understandable.

Compare options with the dependency visible

Ask the adviser to explain how the equipment issue affects each realistic option and what confirmation is needed next. CRP can help organise the operational information. The immediate decision is whether the recovery case relies on an asset the company may not be entitled or able to keep using, rather than which process name sounds most reassuring.