Travelling Through (Business) Zombieland; Rules to Survive and Prosper (Zombie Bite #3)

Our collective expert views on the traps and opportunities
Barren landscape

Talking to my friend Cheryl the other day, I asked her why some business owners know they are running Zombie Companies, and just won’t do anything about it. Cheryl said something that made me think!

If your business is on Job Keeper, as the owner it is likely you’re getting the first ‘regular income’ you’ve had in years. You know how it is, you pay the wages and the critical bills, and look in the bank account to see if there is anything left to pay yourself … or you tip in a bit extra to keep the place afloat until the busy season! Now you have a legal requirement to pay yourself … who wouldn’t want to hold onto that for as long as possible? 

The trouble is, the wind-down is approaching. There will be less money after September and the slow tightening rule. Eventually the money will slow to a stop. Businesses need to use the money to clean things up. Or close the thing up.

As we enter the new financial year, and more stimulus money hits business bank accounts across Australia, Zombie businesses get a quick hit to keep them afloat while they continue to operate and create havoc for viable businesses.

In Zombie Bite #2 we looked at how you can create a ring of protection around your business, minimising the risk of Zombie Businesses harming your business and livelihood. 

So for Zombie Bites 3, we have looked to the cult classic Zombieland. In the film, the character  Columbus has 33 rules for surviving the apocalypse. We’ve asked members of, Insolve and Patrick Coghlan of CreditorWatch for the ‘rules’ that relate to business in the age of the Zombie. So, in no particular order:

Rule #2 – The Double Tap – Never assume a dead zombie can’t hurt you.

Hang on, aren’t they dead already? 

In business, this means the collapse of a Zombie Company that misused government stimulus, only to collapse later, will do damage even after going into Liquidation.

There may be preference claims for debts paid. Ginette Muller of is a ‘Safe Harbour Specialist.  Ginette is concerned that many good businesses that accept payments from the Zombies may have them clawed back. She suspects liquidators will be aggressive with their claims for preferences and those trying to defeat a liquidator should make sure they don’t assist the liquidators case – “it is for the liquidator to prove you received a preference”.

Liquidators need evidence to prove their case and they look for correspondence that threatens to stop supply or commence legal action for non-payment to support their claim to claw back payments.  There are various defences to preference claims. One defence that is quite regularly used is that of ‘good faith’ where you had no reason to suspect a business was insolvent.

“In this environment such a claim might be difficult”,  said Ginette.  Her advice is to encourage your customers to pay you in the ordinary course and if they get tardy, personally reach out to them if you can, to encourage payment.


Rule #22: When in Doubt, Know Your Way Out

Ginette has provided Safe Harbour protection where a company was at risk because a liquidator was pursuing a large preference payment against the business.

“If the liquidator succeeds with their recovery my client will end up insolvent and they themselves will have to go into liquidation” she said.

Safe Harbour is a must for them while the litigation is on foot because if their battle ends in defeat, not having safe harbour could expose the directors personal assets to company creditors.

There are various reasons that a director might consider staying in safe harbour after the government’s mandatory protection period ends in September. It is not difficult to implement and every director should be familiar with the process even if they decide not to avail themselves of the protection.

Bill Cotter of the Insolve Panel says that every business owner should have a strategic plan enabling them to see the long-term picture as well as the short-term tactics for survival. “In business, like in any good zombie movie, you need to know where the exits are. And that’s for everything from winding up a business through to ending a contract or service agreement.”

“Smart business owners will have a plan, they know their risks, they know their dangers, and they will have worked with an expert to put fail-safes, such as safe harbour, in place that will offer them protection in the event of a zombie company harming their business.

“It is vital to have a plan, be prepared and be protected”.

Rule #31: Check the Back Seat – you need to make sure you don’t get nasty surprises

In the movies, you must make sure that any zombie can no longer harm you. It is the same in business, according to Bruce Pasetti of

“When dealing with a potential Zombie Company, you must manage dealings in a way that doesn’t leave you open to claims, or loss of your goods because you weren’t secured when debts they owe you are owed get tangled up in their eventual collapse.” 

At present there are some restrictions on the rights of creditors to collect money they are owed – find out more about that here.

Bruce says, “You can though, make sure your Terms and Conditions are up to date, that you have a valid PPSR registration on goods, and that you are well on top of your debtor book.”

Bruce adds you should be talking to all the clients who have enjoyed terms to gauge how they are doing. Things are tight, and some businesses have removed trading terms altogether. Other measures are less drastic, but they might be collecting debts more vigorously. You need to make a decision. Ask yourself which path is right for protecting debtor sales while also protecting the cash flow of your business.

Patrick Coghlan of CreditorWatch says, “Do your due diligence – it is vital. From credit checks to monitoring debt and payments, there are alarm bells that zombie companies ring when you know what to look for. I’d encourage any business owner to be watchful and to know their numbers inside and out. Numbers are a great sign that a business you are dealing with is in trouble.”

Rule #16 – Opportunity Knocks – And whenever it does, make sure you answer.

Chris Baskerville of the Insolve Panel quotes the words attributed to John F Kennedy:

“When written in Chinese, the word ‘crisis’ is composed of two characters – one represents danger, and one represents opportunity.”

Always quotable himself, Chris says, “ If businesses are smart, they will look at growing their business in uncertain times, because there are opportunities out there. 

“The pandemic and plague of Zombies is a great opportunity to reset your business and to move away from dealing with companies who put you at risk, use the time afforded by government stimulus money to look at new markets and suppliers so that you can come out of the other side healthier.”

Rule #33: Swiss Army Knife – You’ve got to have the right tools? But do you have the right systems (and people) in place?

Patrick Coghlan gives an example how tools such as Creditorwatch’s Payment Predictor and innovative feature DebtorLogic, can help you to get organised. “You can assess your slow customers’ payment behaviour and understand if they’re not prioritising you like the rest of the market or they’re heading into insolvency.” 

At the beginning of the pandemic shutdown, member Stuart Craig highlighted the important conversations you needed to have as a business owner and to take stock of your position.

With government support to many (but certainly not all) businesses in need Stuart says now;

“spend the time and money to evaluate the viability of your business model, particularly your cash flow and income streams. Identify the best people who are critical to keep with you. And do some simple research. Is there a Government grant to help pay for that help?”

Some State and Territory Governments have schemes in place to help business recover from the crisis. Some grants can pay towards the costs of Stuart and other qualified advisors. 

Stuart adds, ”Do you still have a viable business? Will you be stepping off the financial cliff in October into the depths below?”

Rule #8 – Get a Kick-Ass Partner – Who are the best people to back you up?

Bill Cotter of the Insolve Panel says, “In business, we often think we can do it all. We can’t. Having a trusted partner and advisor who has the expertise to help you with critical protection such as PPSR, Safe Harbour, contracts and terms of business is central to being protected.”

“It is a waste of time and effort to try and do what you are not expert at, invest your money in working with legal, accounting and advisory professionals who know their stuff, can advise on the best strategies to take and act for you in your best interests.”

There you are, some ‘rules to survive and hopefully prosper’. Watch out for Zombies!


For more information, check out:

Don’t get caught in the (Zombie Company) Preference Payments trap! (Zombie Bites #2)

Check Yourself, Learn The Warning Signs, Be Alert & Protected (Zombie Bites #1) 

Zombie Companies: How to survive the apocalypse and protect your business from the corporate undead

(this blog was edited for clarity on 5 August 2020)

For the full list of the original rules from the movie Zombieland, visit:

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Any or all of these reasons for business owners with a Pty Ltd company who:

  • have closed or are likely to close their business without any money left 
  • cannot afford $15,000 but want to place their company into liquidation  
  • want to do the right thing and inform their creditors properly about the business closing down 
  • want to draw a line in the sand so they can get on with their future.

If you have personal assets you want to protect, like a family home or director’s guarantees, this may not be for you, but you should ask us.

Cheryl Stainsby

Cheryl is a Director’s Advocate specialising in Crisis Management; Business Health Checks, Asset Protection and Exit Strategy  Find out more or Email Cheryl.

Niall Coburn

Niall Coburn

Niall is a Litigator, Prosecutor and Corporate Investigator. Find out more or Email Niall.

Bruce Pasetti portrait photo

Bruce Pasetti

Bruce Pasetti is the ‘go-to’ for actions for Windup (or to defend companies and directors against similar actions). Bruce is a Solicitor with over 20 years legal and specialist Insolvency experience. Find our more or Email Bruce.

Stuart Craig

Stuart is a Business Transformation Specialist and Certified Practicing Accountant, specialising in business turnaround and restructure, business management and business ownership transfer. Find out more or Email Stuart.

James Flaherty

James Flaherty

James is a business consultant and accountant. He specialises in sales and marketing for the business and finance sectors. Find out more or Email James.


Ginette Muller

Ginette is a Business Crisis Advisor and Accountant specialising in Safe Harbour, refinancing, litigation funding, restructure and business crisis advice. Find out more or  Email Ginette.