The company was incorporated in 2007 and traded from an Essex based factory unit. One of the directors contacted Keith Steven of KSA. A meeting was subsequently held between the directors and KSA regional manager; Malcolm Gray.
KSA were appointed to assist the company with the production of a company voluntary arrangement proposal on 5th December 2012 Turnover to February 2013 was £336k which is a fall of £52k year on year.
The company encountered financial difficulties due to:
• legacy debts incurred in the main by a downturn in trading activity and profitability and the loss of a vital contract
• HMRC and trade creditor debt rose beyond comfortable levels.
The board identified these problems in October 2012 and decided to take professional insolvency advice from KSA to try and deal with the resultant cash flow pressures.
Prior to KSAs appointment, action was taken to replace the lost contract with another and a redundancy was made in order to reduce overheads.
Who was owed what?
• Secured creditor Invoice finance provider with an all monies debenture (fixed and Floating charge) registered on 8th October 2012 Unsecured creditors
• Total debt of £192,125 inc. HMRC at £133,625 (c70%)
So what happened?
• HMRC approved the CVA with standard modifications on 2nd July 2013
• CVA creditors meeting held in London on 16th July 2013. And the CVA was approved by the body of creditors with a dividend of 41p in £1
The CVA meant that 7 jobs have been saved