This company had 3 offices in London offering recruitment services in accountancy and media. A fast expansion plan had backfired and costs ran ahead of budget and sales! Big losses were made quite rapidly and being a provider of temps its PAYE debts were very high as a result.
The owner was based in the southern hemisphere but a local MD was trying hard to get the train back on the tracks without any success.
HMRC had been asked for a time to pay deal and he was getting some positive noises, but then the collector decided to change tack and issued a winding up petition.
The MD had heard of our website from a friend who told him to get help fast.
We requested that HMRC did not advertise the petition and they agreed, 3 months later the company had a strong cash balance as it did not have to pay PAYE and VAT for that time using the CVA approach that we designed.
The CVA proposal was that it would pay 50% of its future profits after tax and a one of £150,000 was paid across the supervisor within 3 months. The overall dividend for creditors was over 55p in £1. Thus the creditors (mainly HMRC) got a good return in year 1 and were happy to accept the CVA proposals.
Despite the directors worrying about the creditors meeting, no one showed up at all which is quite common for us.
THINK THIS INNOVATIVE TURNAROUND APPROACH COULD BE A USEFUL TOOL TO HELP YOUR RECRUITMENT COMPANY? THEN YOU NEED TO TALK TO US NOW.
CALL 0800 9700 539 AND ASK FOR KEITH STEVEN.
Keith Steven, the MD, has written for the Recruiter Magazine - Read the article Serious Cashflow Problem? - All is not Lost!