A Specialist in corporate event management and team building schemes, MotivAction, has entered a company voluntary arrangement (CVA) to handle its £500,000 worth of debt.
The company’s biggest creditors, HMRC and Performing Artistes have agreed to the restructure of the Hertfordshire-based company.
According to their accounts, pre-tax profits almost halved in 2012, falling from £103,000 to £53,000. Because of this, the company felt a CVA was the best way forward in 2014 to help tackle the growing debt.
MotivAction’s Managing Director, David Buxton, commented “The directors took the decision to restructure the business in February 2014 due to specific areas of the business under-performing, however there were no compulsory redundancies”.
He continued, “As part of this restructure, the company has entered into a voluntary arrangement with a small number of creditors, enabling the company to re-focus on the core creative communications and event business. The company is also in the process of securing further investment to move the business forward in what will be an exciting year ahead.”
This is good news for both the company and its creditors because the business can continue to help drive profits. Creditors will receive a substantial amount back in the pound over a fixed period, most likely a far better outcome than if the company went into administration.
As long as a company is viable and the CVA is prepared accordingly with proper financial forecasts, then HMRC are usually very supportive with the arrangement going forward.