An associate of the consultancy LLP contacted KSA regional manager, Amanda Eckersley, to discuss the company’s present financial situation. A meeting was requested and held at the LLP’s premises.
KSA were appointed to assist the company with a Company Voluntary Arrangement (CVA). Turnover for the 2015 trading year had been c£270K.
The company was encountering financial difficulties due to:
- A large litigation action which was settled.
- Inefficient daily operations, falling behind on HMRC submissions
- Failed investment offer
- Severe cashflow issues. .
- The LLP occupies a leased town centre office
- The LLP employs 2 staff excluding the designated members. It was unnecessary to make any redundancies; however, redundancies may be made in conjunction with a CVA.
Bank & Financial facilities
- The bank provides a small overdraft facility
- The bank is unsecured i.e. there is no registered legal charge against the llp.
- There are no finance/lease agreements
- The designated members had provided personal guarantees in respect of a loan facility
Unsecured Creditor debt:
- £150K of which HMRC was 67%
Cost & overhead reduction
- Prior to KSA's appointment, payroll was reduced to the bare minimum.
- All overheads have been reviewed and, where possible, reduced to necessity level. All cost streams are constantly monitored.
- New SEO and digital marketing strategy
The nominee’s review was held and the CVA and nominee’s report were subsequently lodged at court. The CVA proposed 59p 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 LLP is in CVA.
Categories: CVA, What is a CVA or Company voluntary arrangement?