The director of the company was referred to KSA by a former KSA client. The director contacted Keith Steven of KSA to discuss the company’s present financial situation. After this initial telephone conversation a meeting was requested and held at the company’s premises. The company operates within the high end advertising and marketing sector.
KSA were appointed to assist the company with a Company Voluntary Arrangement (CVA) in February 2007. Turnover for the previous 12 months, was c£1.4m.
The company was encountering financial difficulties due to:
- A fraud perpetrated over 9-10 months of 2010. it is estimated that some £340k was stolen which manifested in large liabilities, to HMRC in particular.
- The board identified this critical situation in late January 2011 and highlighted a serious and very urgent cash flow crisis.
- The company occupied leased offices in the UK and 1 abroad
- KSA assisted with the termination of the lease on foreign office utilising the CVA
- The company employed 16 staff including the directors
- KSA assisted the company with one redundancy
Bank & Financial facilities
- The bank was unsecured and provided no loan or overdraft facilities. The company operatied several currency accounts including: US dollar account, Euro account, Bahrain Dollar account and Sterling account
- The directors had provided no Personal Guarantees (PGs) to any creditor.
- Two directors were owed c£12K on the directors’ loan account
Unsecured Creditor debt:
- £430K of which HMRC was 80%
Cost & overhead reduction
- Major fraudulent transactions were identified and the corrupt systems rebuilt.
- The foreign office was closed and the lease cancelled using the CVA
The nominee’s review was held and the CVA and nominee’s report were subsequently lodged at court. The CVA proposed 34p in £1 repayment to unsecured creditors over 5 years.
HMRC provided their response accepting the CVA. The CVA was accepted by the body of creditors at the creditors meeting and the company was placed into the CVA.
Categories: CVA, What is a CVA or Company voluntary arrangement?