
Transport Company Facing Difficulty Following Foray Into Direct Home Delivery
Transport Company Facing Difficulty Following Foray Into Direct Home DeliveryA media production company with a turnover of approximately £180K faced a critical financial situation. Its difficulties were rooted in historic debt to HMRC and a failed “time to pay” arrangement. The director also blamed poor advice from the company’s accountant. The company was technically insolvent due to a lack of cash flow, even with a pipeline of work, because very few of these prospects were converting into paying contracts. The director’s personal assets were also at risk due to a personal guarantee provided to the bank.
The director initially engaged RMT KSA to assist with a Company Voluntary Arrangement (CVA) in October 2015. However, during the process, it became clear that the business was not viable for a CVA. The core issue wasn’t just the debt; it was the fundamental inability to convert potential work into revenue. After discussions, the director made the difficult decision to pivot from a rescue strategy to a formal insolvency process to prevent the situation from worsening.
The director, recognising that a turnaround was not possible, decided to appoint KSA to place the company into a Creditors Voluntary Liquidation (CVL). This choice allowed the director to stop trading in a responsible manner and ensured that the company’s affairs were wound up in an orderly fashion, preventing further financial losses to creditors.
Transport Company Facing Difficulty Following Foray Into Direct Home Delivery
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