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Southern based I.T. and hardware company

The director of the I.T. company contacted KSA to discuss the company’s present financial situation.  A meeting was then requested and held at the company’s premises with Keith Steven representing KSA.

KSA were appointed to assist the company with a Company Voluntary Arrangement (CVA) in October 2009. Turnover for the 2009 financial year had fallen by c£700K, to c£1.3m when compared with the previous year

The company was encountering financial difficulties due to:
- Actual sales have fallen very sharply but enquiries and quotations were at an all time high. This gap was causing the cashflow problems leading to insolvency.

Premises
- The company operated from leased premises

Employees:
- The company employed 4 staff including the one of the directors

Redundancies:
- The company made two redundancies prior to appointing KSA.
- KSA assisted with another redundancy after appointment. 

Bank & Financial facilities
- The bank provided and Invoice finance and Credit card facility
- The Bank was secured by 3 legal charges over the company’s assets
- The company only had one outstanding finance agreement which KSA assisted the directors to cancel using the CVA

Director
- One of the directors had provided a Personal Guarantees (P.G’s) to a the secured creditor.  
- The CVA is sometimes a trigger for the creditor (especially if unsecured) to seek to rely on personal guarantees provided.  This kind of negotiation is something KSA are well versed in and deal with regularly.

Connected Creditors
- There were various connected creditors, including the directors, who had made loans available to the company of c£75K.  
- A connected creditor is any body or individual with a family or vested interest in the company.
- It is a usual HMRC modification (condition of acceptance) that all connected creditors agree to waive there claim to any monies owed and that claim does not survive the CVA

Unsecured Creditor debt:
- £230K of which HMRC was 18.3% 
- Cost & overhead reduction 
- Redundancies have been made both prior and post KSA appointment.
- One individual was designated responsibility for internal accounts, order processing and general administration.
- The director instigated a purchase protocol to ensure value was obtained
- Credit control was tight ended to ensure all debts were collected within 30 days

The nominee’s review was held and the CVA and nominee’s report were subsequently lodged at court in March 2010. The CVA proposed 35p in £1 repayment to unsecured creditors over 5 years.

The CVA was accepted by the body of creditors, including HMRC, at the creditors meeting in late March 2010 and the company went into the CVA. In late May 2014, the supervisor of the CVA issued a notice of completion of the CVA.
 
A revision to the CVA had been circulated to the creditors at the beginning of April 2014 and subsequently approved in late April, in which the company offered to make a one-off payment in full and final settlement of the CVA. Therefore the CVA was completed one year early.

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