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Case Studies

150 YEAR OLD ENGINEERING COMPANY

customer background

The business was founded in the 1860’s and originally traded as ironmongers and farming engineers, although it diversified in subsequent years. The business was incorporated as a limited company in the 1980’s and traded successfully for many years.  

In January 2014, the company’s single largest customer entered into Administration owing in excess of £100,000. The effect of this bad debt, coupled with the loss of future orders, resulted in the company’s turnover reducing significantly, and the Board had no option but to consider the options available.  In March 2015 TBDA was instructed to review the position and promote the company’s survival if at all possible.   

The company proposed a CVA and appointed Beverley Budsworth as Supervisor.  The proposals were widely supported by creditors’, but despite its very best efforts, the company came under increased pressure as a result of a downturn in associated industries.  Ultimately, these factors were beyond its control and in a last attempt to save the business attempts were made to market it for sale.  Although this generated expressions of interest from various parties, no sale was achieved.   

 

Solution 

Steps were taken to place the company into Creditors Voluntary Liquidation and Bev Budsworth was appointed as Liquidator to the company. The team continued to work closely with the company, which remained in occupation at the former trading premises.   

An agreement was reached with a newly incorporated company for it to occupy the premises, subject to maintaining the existing mortgage, and for it to acquire certain assets of the insolvent company.   

approved CVL solution

The team worked hard to reach an agreement, which would allow the newly incorporated company to acquire certain assets, whilst maximising realisations for the benefit of the liquidation. To date, we have made realisations in excess of £122,021. Creditors’ will now be provided with formal notice of the Liquidator’s intention to declare a dividend, and the outlook for trade creditors’ is positive.

Careful consideration must be given to all options available to a financially distressed business. For more advice, fill out our Contact Form and we will be in touch. Alternatively, call our FREE ADVICE LINE on 0800 781 0990.