Paying Safe Harbour advisors; success fees and options
2 mins reading time
Unlike formal appointments, success fees and shares are acceptable.
Who pays?
The purpose of a Safe Harbour appointment is to help the business, so unless you agree otherwise, the cost would normally be met by the company, not the directors – even though it provides invaluable protection for directors.
How much will a Safe Harbour adviser cost and how can directors manage the cost?
One of the frustrating problems for people in financial difficulties is that they know that they need help but don’t have the funds to pay for it.
Yet another advantage of Safe Harbour is that directors can negotiate how the fees and expenses incurred by the appropriate entity are settled. The company and appropriate entity may agree to a success fee or to even accept shares or options in the company. There are no restrictions at law on how fees are paid under Safe Harbour as opposed to formal insolvent appointments – although some advisers may be restricted by their respective professional bodies as to the type of fees they can accept.
The cost will depend on the extent of the problems facing the company, the work that needs to be done, and the size and complexity of the company.
Whilst it is impossible to estimate a cost without understanding the specific circumstances, appropriate entities tend to charge for their time. So, whatever the directors can do to minimise the workload, of and hence the time spent by the appropriate entity, will therefore minimise the cost.
Our advisers offer a free initial consultation which will allow them to better understand what is required to keep you in Safe Harbour and therefore they can estimate the fees before you proceed. Requesting fixed or capped fees, fees taken in shares or options or even a success fee once the company is restructured, is not unusual, but may severely restrict the pool of appropriate consultants willing to assist you.
Stay up to date with our news & insights
Paying Safe Harbour advisors; success fees and options
Unlike formal appointments, success fees and shares are acceptable.
Who pays?
The purpose of a Safe Harbour appointment is to help the business, so unless you agree otherwise, the cost would normally be met by the company, not the directors – even though it provides invaluable protection for directors.
How much will a Safe Harbour adviser cost and how can directors manage the cost?
One of the frustrating problems for people in financial difficulties is that they know that they need help but don’t have the funds to pay for it.
Yet another advantage of Safe Harbour is that directors can negotiate how the fees and expenses incurred by the appropriate entity are settled. The company and appropriate entity may agree to a success fee or to even accept shares or options in the company. There are no restrictions at law on how fees are paid under Safe Harbour as opposed to formal insolvent appointments – although some advisers may be restricted by their respective professional bodies as to the type of fees they can accept.
The cost will depend on the extent of the problems facing the company, the work that needs to be done, and the size and complexity of the company.
Whilst it is impossible to estimate a cost without understanding the specific circumstances, appropriate entities tend to charge for their time. So, whatever the directors can do to minimise the workload, of and hence the time spent by the appropriate entity, will therefore minimise the cost.
Our advisers offer a free initial consultation which will allow them to better understand what is required to keep you in Safe Harbour and therefore they can estimate the fees before you proceed. Requesting fixed or capped fees, fees taken in shares or options or even a success fee once the company is restructured, is not unusual, but may severely restrict the pool of appropriate consultants willing to assist you.