The director of the company contacted Sarah Massey of KSA to discuss the company’s present financial situation. Then, after a subsequent telephone conversation with KSA regional manager, Gary Weber, a meeting was requested and held at the company’s premises.
The company operates within leisure sector and provides high end pub and restaurant services. KSA was appointed to assist the company with a Company Voluntary Arrangement (CVA) on in February 2015. Turnover for 2014, was c£270K.
The company was encountering financial difficulties due to:
- Lower than expected turnover. The directors recently took over the lease financial information supplied by the previous tenant proved to be incorrect and has resulted in the company building debts with creditors.
- Are a leased traditional style public house
- The company employs 10 staff including the directors
- It was not necessary to make any redundancies; however, redundancies may be made utilising the CVA process.
Bank & Financial facilities
- A £5K overdraft facility was provided
- The Bank were unsecured i.e. had no debenture or fixed & floating charge over the company’s assets.
- The directors had provided Personal Guarantees (P.G’s) to the landlord.
- No PGs had been provided to the bank
- There were considerable loan accounts in favour of the directors: it is a usual modification by HMRC i.e. condition of acceptance that the directors (being connected or associated creditors) waive there claim to those monies and the claim does not survive the CVA.
Unsecured Creditor debt:
- c£20K of which HMRC was 100%
Cost & overhead reduction
- Short term rent reduction negotiated
- Negotiated an on going barrelage cost reduction
- New financial and stock control protocols instigated.
- The directors have instigated a demographically orientated marketing campaign utilising conventional and on-line media to ensure comprehensive cover and specific targeting.
The nominee’s review was held and the CVA and nominee’s report were subsequently lodged at court. The CVA proposed 100p in £1 repayment to unsecured creditors over 4 years. HMRC provided their response accepting the CVA.
The CVA was accepted by the body of creditors at the creditors meeting and the company is in CVA.