This company was incorporated in December 2009. One of the directors contacted KSA after reading the website. A Meeting was subsequently held in October 2013 between one of the directors and KSA regional manager, Gary Weber. The meeting was held at the company’s then premises. KSA were appointed to assist the company in late October 2013
The company operated a restaurant and provides catering services to regular daily venues as well as individual functions.
Turnover for the 2013 financial year was £351.6K with a loss of £38.5K. However, due to radical restructuring, sales are forecast to reduce to £161K during the first year of the CVA but showing a net profit of c£26K
The company was encountering financial difficulties due to:
- Losses sustained resulting from the purchase of a leasehold public house in late 2011, which the company operate predominantly as an Italian based cuisine good casual dining restaurant. The pub represents c50% of the company's income but the running costs are having a detrimental effect on the overall business.
- The company operated from leased premises, there were significant arrears owed on the rent and the lease had 3½ years left to run.
- Following discussions with the landlord of the leased premises, the decision was made by the directors to vacate the premises. The company vacated the leased premises on in March 2014. The directors also signed a lease surrender. They had provided personal guarantees which the landlord had verbally agreed not to rely on.
- The CVA meant that 15 jobs were saved however it was necessary to make 4 redundancies.
Bank & Financial facilities
- The company had no loan or overdraft facility and the bank held no security
- The directors had provided no personal guarantees.
- There were no other financial facilities at the time
- Directors loans of c£50K had been made available to the company and were therefore connected creditors.
- On approval of the CVA, the connected creditors agreed to waive their claims to these monies and also agreed their debt would not survive the CVA.
- Both of the directors had been involved with a previous insolvency.
Unsecured Creditor debt:
- £164.5K of which HMRC was 78%
The nominees review took place in March 2014.
The CVA was filed at court at the beginning of April 2014 and subsequently distributed to all creditors. The CVA was then approved at the creditors meeting in April 2014 with a proposed dividend of 53p in £1.
Categories: CVA, What is a CVA or Company voluntary arrangement?