This company was incorporated in 1997 and trades from its premises in the west of England.
The Managing Director contacted Sarah Massey of KSA after reading the website. After a subsequent telephone conversation with KSA Regional Manager, Hugh Gabriel, a meeting was held between him and the directors of the company.
KSA were appointed to assist the company with the production of CVA proposals in October 2013. Turnover in the previous 12 months had stagnated £1.4m
The company was encountering financial difficulties due to:
- arrears with HMRC that commenced in 2008, with numerous time to pay arrangements
- excessive ullage
- The board has cut staff and costs, invested in the plant, and appointed new senior staff.
- Whilst the underlying business is viable, a visit by HMRC concerning the arrears, highlighted the cashflow pressures.
- The bank: secured via debenture.
- no overdraft facility loan,
- balance remaining of c£100k at the date of KSA appointment.
- Trade creditors c£260K of which HMRC were c£250K (c96%)
- There was a large Overdrawn Directors Loan account of c£150K
- The Company had previously had the latest Time To Pay (TTP) proposal refused by HMRC however after KSA appointment the directors confirmed, verbally, that HMRC had reconsidered the TTP and had agreed to it.
This is a case where the directors backed out of the CVA process on the basis that HMRC had reconsidered a recent TTP proposal and approved it.
Categories: CVA, What is a CVA or Company voluntary arrangement?