Having to consider putting your company into Creditors’ Voluntary Liquidation (or CVL) is not something any Director sets out to have to do…
Key Business Information
- Turnover £1.4 million
- Trading for approximately 4 years
- Significant VAT, PAYE and supplier arrears
- Immediate threat of a winding up petition
How We Helped
This company had been behind with its VAT and PAYE payments for over a year after a large bad debt from a customer had left it with severe cash flow difficulties. The company |had managed to make some payments to HMRC during the year but had not reduced the debt by as much as HMRC wanted.
As a result of this, HMRC contacted the company on a Friday to advise that a winding up petition would be issued if the debt was not paid before 4pm on Monday. The directors had already put more than £100,000 of their own money into the company at this point and could not afford to put in any more.
The directors contacted us on the Friday and on Saturday we met at the company premises to discuss the company’s situation. Based on these discussions and on a review of the company’s assets and liabilities, it was apparent that the company should be placed into Administration.
You can find out more about the administration process here...
We arranged for a notice of intention to appoint an Administrator to be filed at Court first thing Monday morning which provided immediate protection from the winding up petition threatened by HMRC.
Over the next 10 days, we worked with the directors to formulate a plan for the Company. During this time, the directors introduced a number of parties who were interested in buying the business.
After 10 days, the company formally moved into Administration. At this time, a deal had not yet been agreed with any of the interested parties and so we traded the business as Administrators for a couple of weeks whilst negotiations went on.
In the end, the directors were able to raise sufficient investment to make an offer of their own for the business. As this offer represented the best return to creditors, we were able to accept and the directors were able to buy back their business but without the burden of its historic debts.
