What creditors actually receive in a small business restructuring

In a small business restructuring, creditors are paid a proportion of what they are owed and the rest is released when the plan is completed. In three matters Greengate Advisory completed for hospitality, retail and construction businesses, debt fell by 74 to 78 per cent, and the two plans that recorded a rate returned 22.45 and 26.25 cents in the dollar. Across the whole market, ASIC recorded more than $101 million paid to unsecured creditors from completed plans between July 2022 and December 2024.

What our own matters returned

These are three restructurings Greengate Advisory acted on. They are individual matters, not a statistical sample, and each turned on its own facts.

Full write-ups: the restaurant, the aquarium retailer and the plumbing contractor.

How the return is worked out

A restructuring plan offers creditors a fixed pool, usually funded from future trading, a lump sum from the director, or the sale of an asset. That pool is divided between the admitted debts, which produces the cents-in-the-dollar figure. When the company completes the plan, the balance of those debts is released.

Three things follow from that. The return depends on what the company can actually afford, not on what creditors would like. It is fixed at the outset, so a plan that cannot be performed is worse than no plan at all. And because the ATO is usually the largest creditor, its view effectively decides whether a plan passes.

What the wider picture looks like

ASIC reviewed the process in Report 810: Review of small business restructuring process 2022–24, published June 2025. It found:

• 3,388 restructuring appointments began between 1 July 2022 and 31 December 2024.
• 2,820 of those went on to a restructuring plan. Most of the remainder ended because creditors rejected the proposal.
• More than $101 million was distributed to unsecured creditors from completed plans, with about 87 per cent of it going to the ATO.
• Median remuneration for the restructuring process was $21,998.

The concentration of the money going to the ATO matches what we see in practice: these are mostly tax debts, and the ATO is the creditor whose vote matters.

Why returns vary so much

• What the business can generate. A plan funded from trading is limited by the margin the business actually makes.
• Whether anyone contributes. A director or third party putting money in lifts the return directly.
• The asset position. Creditors compare the offer with what they would receive in a liquidation, so a company with realisable assets has to offer more.
• Employee entitlements. These keep their priority, which affects what is left for other creditors.
• Eligibility. Total liabilities must be $1 million or less, employee entitlements that are due must be paid and tax lodgements must be up to date.

If you are a creditor

Weigh the offer against what a winding up would realistically return, which is often very little once the costs of the liquidation and employee entitlements are paid. The restructuring practitioner’s report sets out that comparison, and it is the part worth reading closely.

If you are a director

A restructuring only works if the plan can be performed. Before proposing one, be honest about the margin the business generates and what, if anything, you can contribute. Where the debt is mostly tax, the question is usually whether the ATO will accept the offer, and that is a judgement a registered liquidator can make before anything is put to creditors. If you have already received a director penalty notice or a statutory demand, the timetable is shorter than you think.

How Greengate Advisory can help

Our registered liquidators act as restructuring practitioners and will tell you before you start whether a plan is likely to be accepted, and what return it would need to offer. The first consultation is free and confidential, and we can explain the options in English, Mandarin, Cantonese or Korean. Call (02) 8318 3699 in Sydney or (07) 3868 1888 in Brisbane.

Common questions

What return do creditors get in a small business restructuring?

It depends entirely on what the company can fund. In two completed Greengate matters the returns were 22.45 and 26.25 cents in the dollar. Across the market, ASIC recorded more than $101 million distributed to unsecured creditors from completed plans between July 2022 and December 2024.

How much debt can a restructuring plan remove?

In the three Greengate matters described on this page, total debt fell by about 74 to 78 per cent. The balance of the admitted debts is released once the company completes the plan.

Who receives most of the money?

Usually the ATO, because it is usually the largest creditor. ASIC found about 87 per cent of the money distributed from completed plans went to the ATO.

How often do creditors accept a restructuring plan?

ASIC recorded 3,388 appointments between July 2022 and December 2024, of which 2,820 went on to a plan. Most of the rest ended because creditors rejected the proposal.

What does a small business restructuring cost?

ASIC reported median remuneration for the restructuring process of $21,998 over the 2022 to 2024 review period. The cost of a particular matter depends on its complexity.

Does a better offer make acceptance more likely?

It helps, but the test creditors apply is whether the plan returns more than a liquidation would. A realistic estimate of the liquidation return matters as much as the offer itself.

Are these outcomes typical?

No. They are three individual matters, each decided on its own facts, and they are not a statistical sample. Outcomes depend on the circumstances of each business and on creditors accepting the plan.

This page is general information, not advice about your situation. Outcomes depend on the circumstances of each business and on creditors accepting the plan. Sources: Greengate Advisory matter records as published in the case studies linked above; ASIC Report 810: Review of small business restructuring process 2022–24 (June 2025) and media release 25-111MR. Checked 29 September 2026.