Harrison Lightning Protection and Earthing Limited considers CVA

14 March 2014

Based in Darlington, County Durham, the lightning protection specialist has called in administrators and is hoping to move forward with a Company Voluntary Arrangement (CVA).

After struggling with debt, the firm believed administration was the best way forward as increasing debt to creditors, like HMRC, was becoming a growing concern. However they still are continuing to trade with a ‘full order book’ and are hoping to restructure with a CVA. 

Rob Sadler of Begbies Traynor and David Broadbent of Broadbent Business Recovery were appointed joint administrators on 28th February. They have looked at all of the options available, including selling the business or entering a CVA to manage the debts. 

According to Companies House, the company owes over £243,000 in debt to creditors. For the CVA to be accepted, over 75% of creditors (by value) must approve it. If the arrangement goes ahead, there will be a debt repayment plan put in place, allowing the company to pay back a significant proportion of debt back to unsecured creditors over a period of two to five years, for example.  

Going into administration can be a powerful way to protect the company against aggressive creditors This allows time for the company to be restructured and then the administrator can hand the business back to the directors and they can pay back a proportion of the remaining debts in a CVA. In essence, the process allows a ‘breathing space’ so it can plan a way forward. See our ‘administration followed by a CVA’ page for more information.

In one case we put a business into administration and the following CVA is paying back 100p in the pound over 5 years. The company continues to do well and is even currently overpaying to try and reduce the term. For more information on this particular case then call Wayne Harrison on 0800 9700539. A case study will be published soon.