This is a small family owned company in the South East of England. It faces problems that will be familiar to many retailers across the UK; sales declining, margin pressures, rising non domestic rates and lack of bank support.
KSA Group was able to help as follows;
The managing director contacted KSA Group via the www.companyrescue.co.uk website. Earlier this year (2012) and we gave him general advice. Nothing further was heard from the company.
The company was then served a winding up petition (WUP), unfortunately this had also been advertised by the petitioner which was HMRC for £238,941 NIC, PAYE and VAT arrears. Total creditor debt is £244,893. So the Crown was by far the largest creditor.
The director had been taking unqualified advice from a family friend which led to a delay in contact with HMRC and the issuing of the petition. Had they ACTED SOONER perhaps the WUP would not have been issued. As you can imagine failure to communicate with any creditor leads to suspicions and regrettably the family friend thought it was best NOT TO TALK TO HMRC! Wrong.
We arranged a meeting with Malcolm Gray our expert regional manager, which was held within a few hours and our detailed solutions report was completed and sent to director within 24 hours.
The petition advertisement, meant that the bank account had been frozen and so we referred the case our colleagues at Lexlaw, Ali Akram took a copy of KSAs solutions report into court and obtained a 70 day adjournment and a specific Validation Order (VO) was agreed with the Registrar. This allows the company to pay certain creditors and to function.
Then a general VO was subsequently obtained when Ali returned to court with a draft CVA document. This freed up the account completely until the CVA was approved.
As a result of the family friend advice, the company could not pay for the CVA or the court case until the general VO was approved, so the director had to fund all of the court fees and part of the CVA advisory fee personally
Negotiations took place with HMRC and a CVA was approved in July 2012, the dividend payable to creditors is 47p in £1.
Moral of the story here is WHY RISK YOUR BUSINESS and take advice from lay people or poor quality websites?
GET QUALITY insolvency and turnaround advice, we provide this free of initial charges and the free first meeting is always followed up by a written solutions report.