CVA Case Study Two Haulage companies

14 November 2013

In December 2004 we were asked to look at a specialist haulage company that also had large logistics warehouses.

The companies had traded under family control for 45 years and then were sold to a competitor. Despite extensive due diligence it was discovered that there were serious errors on the financial reporting which the due diligence had not spotted.

Both companies were insolvent and the vendor was forced to repay some of the sale consideration. An industry expert was brought in and he assessed both companies as viable but with too great a debt burden to service.

KSA was brought in to assess the position and we found:
• Large CID (invoice discounting) exposure, lender twitchy
• Both companies loss-making
• Poor staff morale
• Extensive firefighting at all levels
• No business plan
• Running out of cash before Christmas 2004
• Wages would not be paid for December

The shareholders agreed to KSA leading a deep seated restructure. We closed down unprofitable work, removed around 20 people and cut general overheads.

Then a separate CVA was proposed for each company and these allowed repayment of 23p and 34p in £1 respectively. 98% approved the deals.

The landlord tried to forfeit the lease on a depot and storage facility, this was subsequently defeated (see below for more details).

Now around 2 years later the companies are still struggling to be very profitable but all CVA contributions are up to date and the parent business is now growing quickly, new contracts have been won and the boards have secured an investment in new fleet from the parent company.


This KSA rescue job was subject of a Court of Appeal decision in late 2006.

Call Keith Steven now to receive the PDF of Justice Neubergers decision and get commentary from him on how it is a vitally important case for all landlords and tenants involved with insolvency and CVAs.


The companies have paid off the CVA at 23p and 34p respectively after 3 years in CVA!

Categories: CVA

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