An electrical services contractor, working in the industrial and commercial building and construction sector based in Kent saved by a Company Voluntary Arrangement.
The director contacted KSA Group. A meeting was held between the director and KSA Group regional manager on 6th August 2012. KSA were appointed to assist the company on 10th August 2012. The company encountered financial difficulties because of considerable sums owed by two main contractors. The company was owed c. £85k in certified payments and some of the debtor days exceeded 16 months. The director had cut costs prior to KSA Group's appointment via one redundancy. However, a winding up petition was issued by one of the trade creditors.
So what were the debts?
• Unsecured creditor debt (including HMRC at £57k ) £283,245
• One trade creditor who served the winding up petition (WUP)
• Despite continued dialogue and negotiation with KSA Group and the company's solicitor; Lex Law, the WUP was advertised on 6th September 2012.
• The company's bank account was then frozen.
• WUP hearing date was 17th September.
What did we do?
• An adjournment was applied for and granted until 22nd October.
• Discussions were held during this time with the companys' principal customer who confirmed their continued support; ultimately awarding the company a contract in the region of £750k.
• A General Validation Order (VO) was obtained on 28th September.
• The bank were reluctant to unfreeze the account causing Lex Law to spell out the ramifications of such action on 4th October and the bank was immediately un-frozen
• The CVA was filed at court on 28th September.
What was the result?
• The petitioner maintained their aggressive stance and voted against the CVA.
• Approved by the majority of creditors at the creditors meeting after an 11th hour negotiation with a key creditor on 19th October 2012.
• However a modified dividend of 55p in £1 (original proposed dividend 44p in £1) was the outcome.
• Lex Law attended adjourned WUP hearing on Monday 22nd October 2012 to ensure that that the WUP was dismissed.
• Company is now trading with a restructured balance sheet and is in a much healthier position than it was before it took action!
In conclusion, many obstacles were put in our path however because the director was diligent in providing management and financial information quickly a satisfactory result was obtained.