
Transport Company Facing Difficulty Following Foray Into Direct Home Delivery
Transport Company Facing Difficulty Following Foray Into Direct Home DeliveryA retail company in Essex, incorporated in 2003 by a group of friends and family, was facing financial distress due to a change in its local market. The opening of a new retail center in the area drew away many local businesses and significantly reduced footfall, making the existing location unviable. Although the company had been operating at a small profit, it was not focused on maximizing its potential. The situation was complicated by the fact that the company, which had a small number of long-term employees, could not afford to make staff redundant to cut costs. The directors had also accumulated a significant VAT debt of around £47,000 from an informal “VAT holiday” with HMRC that began in 2008. With trade creditor arrears of approximately £9,000 and a business that was failing, the directors needed a way to close the business down responsibly.
In September 2012, the directors contacted KSA Group to seek professional insolvency advice. They were looking for a way to shut down the business and repay its creditors while avoiding a formal liquidation. The directors proposed having a closing-down sale to raise as much cash as possible to offer a full and final settlement to creditors and staff. KSA issued a solutions letter outlining the various options available to the company, including a formal liquidation process. The directors were initially hoping for a solution that would allow them to settle their debts without resorting to a formal insolvency, but they eventually realized that the business was not going to be able to avoid terminal insolvency.
After reconnecting with KSA Group in April 2013, the directors made the difficult decision to formally liquidate the company. They appointed KSA Group to liaise with and produce a full and final statement of affairs for the company’s creditors. A creditors’ meeting was called, and KSA Group’s licensed insolvency practitioners, Eric Walls and Wayne Harrison, were appointed as joint liquidators by the company’s creditors on April 5, 2013. While a liquidation is never the preferred outcome, it was the most responsible way to wind down a failing business and ensure that all creditors were treated fairly. The directors’ proactive approach in seeking professional advice allowed them to avoid a worse situation and to manage the company’s closure in a controlled and orderly manner.
Transport Company Facing Difficulty Following Foray Into Direct Home Delivery
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