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Advisors Guide
Whether you are a chartered accountant, certified accountant, business
lawyer, professional business advisor, financial packaging advisor or
management consultant you will, inevitably come across distress situations.
What should you do when faced with a distressed company, directors and
managers under real pressure? See introduction for how to use the rest of
this site.
If you really believe in the business’s viability and want to see some the
company helped our suggestion is to follow the same logical approach as the
director when using this site. Of course the ability for the company to pay
your fees has to be closely examined and a concise approach will mitigate
costs.
If the business appears to be beyond saving, common sense would dictate that
it is better to cut losses and advise the directors to quickly take advice
from a turnaround or insolvency practitioner. Bear in mind that most small
business’s find making decisions very difficult. It seems to be easier not
to take a decision for risk of getting it wrong. As professional advisors it
is our duty to help the directors gather information, give appropriate
advice and point them down the decision making process. However most
advisors we are in contact with express a fear that they do not understand
the various techniques - the word insolvency is associated with failure and
most people wish to avoid that. So to improve your knowledge of the steps
and techniques
Advisor’s Suggested Steps
Establish if the business is viable if the current difficulties could be
removed
Establish if it is insolvent - to do this
Look at the warning signs page
Look at the guide to establishing insolvency at insolvent page.
If they have legal actions against them, do you and the directors understand
these actions? If not look at legal actions page and ensure they are
reacting properly.
Build a fast statement of affairs - essentially just an update estimated
balance sheet showing assets, creditors and debtors. This helps establish
the current position
Look hard at the business and its niche within its marketplace.
Is the market expanding or contracting - can you see if the business’s
product / service is viable?
Does the company have a sales and marketing policy?
Does it just need a cogent plan to get out of the sales mire?
Are the managers up to the job? Would some changes really help?
Go to your objectives page and decide with the directors what they want to
do with the business.
Again look at their ability and capability
With our professional help and removal of pressure will they have a fair
chance of succeeding with a rescue?
Should they consider closure to protect creditors and themselves?
Could you help with refinancing with the bank or other debt providers?
Then go to your options page and learn about the available options for
distressed directors
Dispassionately examine the business and then consider the options.
Look at the disadvantages and advantages of each option: CVA,
Administration, liquidations, trading out, refinancing
Think about each technique - what would it do for their business?
After reading do’s and don’ts pages.
Obtain further information from the company
Meet with directors
Help them decide on a course of action
Convincing them to act - whether closure or continuation - is vital
If you want more detailed assistance or information, email us, use the
contact form, call our support line or write to us (see contact page. We
will need the following information to assist us in determining whether it
is a suitable case for our assistance or whether closure is the most
sensible option.
Brief information:
Up to date creditors list
Debtors list
Current bank and other secured lender’s position
Last audited accounts
Most recent management accounts.
We will be happy to provide a confidentiality statement to protect the
advisor/client relationship.
We have many types of finance available and investors looking to get
involved with distressed businesses, call us now or fill out contact form.
New finance may obviate the need for radical action - study refinancing
options.
We do not need lots and lots of paper or faxes - we need a simple synopsis
of the current position, a view on viability and what the directors want to
do. We are happy to answer - free of charge - any sensible query. Call now
for a free chat about the company’s problems.
FREE SEMINARS - learn how to spot warning signs, deal with problem
clients, work out solutions, save businesses. We can provide hands on
training for you and your colleagues free of charge. We provide seminar
training to accountants, Business Link Advisors, venture capital companies,
bankers, insolvency practitioners, management consultants and turnaround
specialists.
Interested in organising free training - email us now!
Are you a technical insolvency advisor? See our summary of the main CVA
changes brought about by clicking here:
Insolvency Act 2000. Your comments can be sent by email by clicking
here.
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