The director of the company contacted Sarah Massey of KSA to discuss the company’s present financial situation. Then, after a telephone conversation with KSA regional manager Gary Weber, a meeting was requested and held at the company’s premises.
KSA were appointed to assist the company with a Company Voluntary Arrangement (CVA) in November 2015. Turnover for the 2015 trading year, was c£700K.
The company was encountering financial difficulties due to:
- A downturn in the market resulting in reduced revenue
- High staff overheads.
- The company occupies a lease unit.
- The company employs 10 staff including the director
- During the CVA process it was necessary to make 5 Redundancies?
- A CVA may be used to make redundancies without the company incurring the potentially high redundancy payment costs. The redundant employee claims these monies from the redundancy payment office via the insolvency service.
Bank & Financial facilities
- The bank was secured and provided banking and factoring facilities.
- The bank was secured via an all assets debenture.
- A former director had provided an indemnity to the bank
Unsecured Creditor debt:
- £121K of which HMRC was 45%
Cost & overhead reduction
- the redundancies list above were made as part of the closure of a loss making arm of the business.
The nominee’s review was held and the CVA and nominee’s report were subsequently lodged at court. The CVA proposed 41p 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 is in CVA.