Separate a restructure proposal from a creditor’s actual agreement

The model contains hoped-for concessions

Imagine a director reduces supplier repayments in a spreadsheet after a friendly conversation about restructuring. The supplier said it would consider the request, but has not accepted it. The revised model now shows positive cash. That result depends on a concession still unresolved. Keep the existing obligation and proposed alternative clearly identified until the position is properly confirmed.

Check the implications with qualified advisers

ASIC's guidance for directors in financial difficulty recommends obtaining appropriate advice and remaining informed about the company position. A spreadsheet scenario does not change legal obligations. Ask your accountant, insolvency specialist and lawyer how to assess the current position and proposed arrangements. Do not assume that informal support from one creditor establishes a restructuring option is available or suitable.

Source: ASIC: Insolvency for directors

Use clear discussion statuses

For each proposal, record whether it has been drafted, sent, discussed, conditionally accepted or formally documented. Save the correspondence supporting that status. Avoid vague labels such as sorted. In the hypothetical example, the supplier's willingness to consider lower repayments belongs in the discussion record, while the conditions and final decision remain open questions.

Capture what the concession actually covers

A creditor might discuss timing without reducing the balance, or accept one temporary deferral without changing later payments. Record the proposed amount, duration and conditions precisely. Ask for clarification where the response is ambiguous. Do not extend a narrow statement into a wider concession simply because the broader interpretation makes the cash forecast work.

Keep alternative forecasts identifiable

Show the position under existing arrangements separately from any proposed restructuring case. Label assumptions and have the accountant check the calculations. If several creditor concessions are needed together, show that dependency explicitly. A proposal may look viable only when every requested change is accepted; advisers need to see that before the business acts as though the whole package is secure.

Confirm before relying on the change

Have accepted arrangements reviewed and documented appropriately, including responsibility for monitoring performance. Update the forecast only with a visible explanation of what changed and why. CRP can help organise the commercial discussions. The useful discipline is to keep hope, negotiation and confirmed arrangements separate so the business does not spend money on the strength of an agreement that has not been made.