The director of the company contacted Sarah Massey of KSA to discuss the company’s present financial situation. Then, after a subsequent telephone conversation with KSA regional manager, Gary Weber, a meeting was requested and held at the company’s premises.
The company operates within media production sector. KSA were appointed to assist the company with a Company Voluntary Arrangement (CVA) in October 2015. Turnover for the 2014 trading year, was c£180K.
The company was encountering financial difficulties due to:
- Historic debt to HMRC
- Poor advice from the accountant according to the director.
- Failed 'time to pay' arrangement with HMRC
- The company trades from leased premises.
- The company employ 1 member of staff including the director
Bank & Financial facilities
- The company had a £1,000 overdraft facility
- The bank is unsecured
- The company had no finance agreements
- The director had provided Personal Guarantees (P.G’s) to the bank.
- The director’s loan account was un-quantified.
Unsecured Creditor debt:
- c£70K of which HMRC was 100%
During the work on the CVA proposals it became apparent that the company had a great deal of work in the ‘pipeline’ however, very little was turning into contracts that would result in cash for the company. It was therefore obvious that the business was no longer viable and after discussion, the director decided to appoint KSA to place the company in to CVL (creditors voluntary liquidation).
Categories: Liquidation, Complete Guide to Creditors Voluntary Liquidation CVL