Software designer company exits CVA early

22 November 2013

The company accountant contacted KSA as he was concerned that the business was in serious financial difficulty and a meeting was held at the companys premises. KSA was appointed to assist the company.


The company encountered compounding financial difficulties due to;
• Lower than forecast sales
• High overheads
• A substantial investment in a new CRM programme that was not quite market ready
• A small number of bad debts from insolvent clients and
• Incomplete projects.

What was the situation with the creditors?

Secured
Bank was secured with £26k o/d facility and £100k outstanding on EFG loan (same Bank). Joint and Several PGs had been provided by both directors in respect of Loan and overdraft facility.


Unsecured creditors
Total debt of £383,261 inc. HMRC at £362,926 (c.95%)


Employees


The CVA meant that 16 jobs have been saved with no redundancies


HMRC initially rejected the CVA on 3rd January 2012


HMRC approved the CVA with standard modifications on 12th January 2012


CVA was approved by the body of creditors at the creditors meeting held in London on 12th January 2012.. Dividend 40p in £1


The directors proposes a one off payment in full and final settlement of the CVA.


HMRC Accepted 8th February 2013.


Fully accepted by the body of creditors on 25th February 2013

Categories: CVA, What is a CVA or Company voluntary arrangement?