Hamilton Locke recently advised Alan Walker and Glenn Livingstone of WLP Restructuring in their capacity as voluntary administrators of the Body Catalyst Group on the successful restructure of its body shaping and wellness treatment business.
On 7 December 2023, 46 companies in the Body Catalyst Group, a non-invasive body sculpting cosmetic chain with clinics around Australia and New Zealand, appointed Alan Walker and Glenn Livingstone from WLP Restructuring as voluntary administrators (Administrators).
Following their appointment, the Administrators continued to operate the profitable trading clinics in the Group and sought expressions of interest from parties interested in acquiring the clinics and/or business and assets. It became clear through the trading of the business that the Group needed to restructure its financial affairs and operations to return to profitability.
The founder and director of the Group put forward a pooled deed of company arrangement (DOCA), in respect of companies operating certain clinics in the Group, which was approved at the second meetings of creditors and was supported by the senior secured creditor as part of a broader turnaround. The restructure saw a creditors’ trust established, allowing the DOCA to effectuate within hours and allowing control of the relevant clinics to be returned to the director so that the business could continue to trade. Pursuant to the DOCA, creditors received a better return than a liquidation of the ongoing trading companies, employees associated with those companies retained their jobs and the goodwill in the business remained by allowing customers to continue to use the services and also use prepaid vouchers and appointments. The director plans to move the Group to a hybrid owner / operator model to allow management at a store level to benefit from the upside and promote viability going forward.
Critical to the success of this restructure was early engagement by the Administrators with key stakeholders and the negotiation of a commercially acceptable position with the senior secured lender to deleverage the restructured business.
Commenting on the transaction, Nicholas Edwards said: “The DOCA approved allows the right-sizing of the business to a more sustainable footprint, allows continuity of employment and a far superior return to all creditors (including the secured creditor) than would have occurred in a liquidation.”
Commenting on the restructure and the Hamilton Locke team, Alan Walker of WLP Restructuring said: “It was a pleasure working with Nick and the Hamilton Locke team to achieve what is a great outcome for customers, suppliers and employees. The Hamilton Locke team is responsive and able to navigate any complexities that arise technically and commercially.”