Sunderland Home Services Business – Dispute With Former Directors

The Challenge

A Sunderland based company specialising in home services experienced a significant crisis due to a dispute with former directors. The Managing Director became preoccupied with legal actions, losing focus on the business. This led to financial mismanagement, resulting in an inability to pay PAYE and other taxes. Arrears with HMRC built up to £75,000, and after a Time to Pay deal was refused, HMRC sent in bailiffs, signalling a critical stage of financial distress.

The Solution

The company engaged RMT KSA, which helped the Managing Director to refocus on the business’s core operations. RMT KSA assisted in building a new platform for growth and attracting new private equity. The key component of the rescue strategy was a Company Voluntary Arrangement (CVA), which would allow the company to restructure its debt and provide a stable foundation for the new investment.

The Results

The CVA was a success, leading to a complete business turnaround. With the new capital and a restructured balance sheet, the company’s sales are now at £3m and growing fast. The success of the rescue is attributed not only to the CVA and new investment but also to the strong management which came post-CVA, demonstrated by the Managing Director and the operations director.