This Eastern-based company was incorporated in April 2007. The director contacted KSA after reading the website. A meeting was subsequently held between the directors and KSA regional manager, Malcolm Gray.
The company is a supplier, system designer and installer of cutting edge audio visual equipment, employing 4 people including officers.
KSA were appointed to assist the company in May 2011. Turnover for the 2010 financial year was in excess of £1m however turnover for the 2011 financial year was predicted to be £666K
The company was encountering financial difficulties due to:
- Financial mismanagement resulting in the discovery of unpaid and undeclared VAT amounting to c£150k.
- The board had already identified this issue prior to KSA's appointment and attempted to reduce costs and overheads. However, the board recognised that severe cash flow pressures lay ahead and a longer term radical strategy was necessary.
- The company operates from leased premises and there were no arrears
- The CVA meant that four jobs were saved.
Bank & Financial facilities
- The company had no loan or overdraft facility and the bank held no security
- The directors had provided no personal guarantees
- One of the directors and an associated business were owed c£80K for loans made available to the company: both connected creditors agreed to waive their claims to these monies.
- One of the directors had previously been involved with a company which was placed into administration.
Unsecured Creditor debt:
- £225K of which HMRC was 76%
A liability order granted to the local authority in respect of outstanding Business Rates debt of c£3K was negotiated and delayed of enforcement for a month. The creditor was provided with a draft CVA on receipt of which it was agreed action would be held until the creditors meeting took place.
The nominees review took place in August 2011.
The CVA was approved at the creditors meeting in September 2011 with a proposed dividend of 49p in the £1.
Categories: CVA, What is a CVA or Company voluntary arrangement?