West Midlands Partnership / Simultaneous IVA's – Machine Tool Manufacturers.

Based near Birmingham this business had been very successful before expanding to new bigger property. Sales had risen from £700 to £900k and customers “just walk through the door”.

Like many engineering companies they had great skills and client base but chronically bad accounting information. They ran out of cash several times in the next two years and then could not remortgage any further. Then they bulked up credit card debts. So finally the partnership and the 3 of the 4 partners were insolvent.

Under Joint and Several liability the fourth partner would have been made insolvent if they had entered bankruptcy anyway so this was an epic mess.

So of course they lost their biggest customer to insolvency and there was no plan, business plan or marketing to deal with that. Sales fell by £230,000 a year and they were facing bankruptcy.

Our west midlands director Gordon Boden met the partners after they contacted us through this website. The financial reporting was so bad Gordon brought in two accountants JUST to try and ascertain where the business stood.

After that it was plain that SIMIVA (Voluntary Arrangements) was the solution albeit it very complicated solution with 5 separate insolvencies to deal with.

This was KSA’s recovery strategy:

• Stop the lavish holidays, spending and get all partners to accept they were facing bankruptcy, loss of their homes and cars
• Return 2 of the 6 cars they ran through the company (including two 4*4’s costing £700 per month each
• Set out a marketing plan to win new customers
• Introduce outsourced financial reporting from Gordon’s team
• Put together 5 voluntary arrangements (one for the partnership)
• Ask the creditors to support a deal to repay 50% of future profits

Now we like a challenge but this was a very complex case, however after extensive discussion with HMRC the deals were approved. This was worth all the effort when we saw the smiles on the partner’s faces!

Another great job by KSA!

THINK THIS INNOVATIVE TURNAROUND APPROACH COULD BE A USEFUL TOOL TO HELP SAVE YOUR BUSINESS? THEN YOU NEED TO TALK TO US NOW.

CALL 0800 9700 539 AND ASK FOR IAIN CAMPBELL, GORDON BODEN OR KEITH STEVEN.