Recruitment company sales £3.3m, brought down by bad management in 2003.
This company was a fast growing recruitment group. Strong MD with a great track record. She became ill and the company suffered fairly soon after. Debts were built up and the company slipped into insolvency.
When well enough to go into work one day, she discovered that the company could not pay its salaries that month. When she went on sick it had a £250,000 bank overdraft and had £200,000 cash at bank. When she came back the overdraft was nearer £290,000!
She approached us through the website to ask for help, we liked her and thought that if she was fit enough, then recovery was a strong likelihood.
So a CVA was eventually (after 3 months) proposed and the company was also downsized to cut costs, the managers had recruited despite falling sales. So we cleared out the debt and the deadwood staff and management.
The CVA proposed 43p in £1 to the creditors over 5 years, which is about normal for our clients CVAs. Unfortunately the company's MD was still not firing on all cylinders and an oversight saw the biggest client let down, again.
This was the last straw as the client (a household name company) needed to have good quality recruitment services and these could easily be sourced from much bigger companies than our client.
So they left and the company's sales fell below the level needed to make any sense. The MD tried to bring in new sales people to drive things on but her heart and drive weren't there. The illness coupled with the severe stress of insolvency and turnaround was too much and she closed the company down.
I am pleased to say that she did recover and now runs a successful recruitment company in East London.
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CALL 0800 9700 539 AND ASK FOR KEITH STEVEN.