VA offers breathing space and a path forward with expert guidance.
The signs are all too familiar: bills piling up, creditors calling daily, wages overdue. For directors, the pressure is relentless, and when the tank finally runs dry, liquidation can feel like the only way out.
But liquidation is not the only path. Voluntary administration (VA) offers a chance to pause, regroup, and rebuild under the guidance of an expert. Despite that company-saving potential, it’s said to be underused in New Zealand.
As Bryan Williams, Principal of BWA Insolvency, puts it: “If there is no gas in the tank, then the vehicle’s stalled. The sooner you become involved, the less marketplace damage exists.”
VA is a formal insolvency process that gives struggling businesses breathing space. An independent administrator steps in to assess the situation, negotiate with creditors, and create a pathway forward.
A common misconception is that VA strips directors of their authority, but according to Williams, the opposite is true.
“It’s imperative that the administrator and the people in the business work together cooperatively. One brings knowledge of the business and how gross profit is earned; the other brings the enabling capabilities of the law. Together, you can achieve an outcome that wouldn’t otherwise be possible,” he says.
Williams speaks from experience. With 50 years in business and 35 years practising as an insolvency specialist, he has repaired, restored and rehabilitated hundreds of business situations.
“I have left a trail of very satisfied people because of my involvement,” he says.
So why do many directors only consider VA when it’s too late? Part of the answer lies in psychology. Owners often see their business as an extension of themselves and resist the idea of handing over control. Others still view insolvency processes as a mark of failure, not a chance to fight for survival.
Williams warns that delay can be fatal. Once cashflow runs out and contracts are breached, an administrator’s options shrink fast. Acting early preserves both relationships and the value needed for recovery.
He points to BWA’s Quarterly Market Reports, which indicate liquidations are rising while voluntary administrations are in decline. Williams believes this reflects a lack of awareness and misplaced hesitation among directors.
“Voluntary administration can potentially keep a company from going into liquidation. While every circumstance is unique, a successful VA can return a business to viability, meaning employment is protected, creditors are paid, and the company’s value to the community is preserved.”
The advantages of acting early can be significant: creditors gain certainty, employees are more likely to keep their jobs, and brand reputation is easier to protect. Williams stresses that waiting until there are no resources left simply reduces the odds – and increases the pressure.
“Creditors are not constantly picking up the phone saying, ‘pay me, pay me.’ Staff are not voicing concerns over payroll. Those factors matter enormously when you’re trying to make a business work,” he says.
Behind every distressed company are people – families, employees, and communities who rely on it. Williams emphasises that VA is about working with directors, not against them.
“The law is simply a facilitator. What matters is having the skill and manner to work with creditors, suppliers and staff, and the business acumen to see how viability can be restored.”
Sometimes, saving the legal entity isn’t possible, but the business itself can survive.
“We might not turn a company around, but we might turn the business around. The company may not survive, but the business, the jobs, the relationships, the know-how – that can all be maintained and often carried forward in a new entity.”
How do you know it’s time to call in an administrator? He believes directors should act when they see consistent cashflow shortfalls, missed tax or wage payments, mounting creditor demands, or liabilities creeping above asset values.
“If all you do is deal grimly with overbearing creditor demands and operational challenges, all you’ll get is the same thing but in a smaller version, lower sales, fewer resources, less capacity. Instead, ask: what can I actually do here? That’s when options like voluntary administration can return the business to viability.”
VA is not a loss of control, nor is it a mark of failure, Williams says. It is a legal framework designed to give a business space to recover and protect what matters most: jobs, relationships, community value, and the owner’s interests – whether that’s saving a life’s work or preserving investment.
Williams urges directors not to see it as a last resort, but as a lifeline.
“It needs to be considered in a strategic mode before it’s too late. The earlier directors explore their options, the more chance they have of returning the business to viability.”
For more information on how voluntary administration can help your business, visit BWA Insolvency or contact Williams directly.