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Case Studies

Anthony – Director of a Communications Company

customer background

“Anthony” was a director of a telecommunications company which had encountered difficulties and been placed into Creditors’ Voluntary Liquidation. At the commencement of the liquidation the company’s records had indicated that Anthony had an overdrawn Directors Loan Account (“DLA”) in the amount of £70,000, which was payable to the company. The balance of the overdrawn DLA was subsequently sold by the Liquidators to a litigation finance company.

Almost three years after commencement of the liquidation, Anthony received a Statutory Demand requesting payment of the balance in full. This demand lapsed and solicitors acting for the litigation finance company advised Anthony that a petition would be presented for his bankruptcy.

Anthony’s residential property had significant equity and for this reason (and others) the effects of bankruptcy would be extremely detrimental to his personal financial position. Anthony sought advice on his options and was referred to The Business Debt Advisor by his financial advisor.

Solution

The team at The Business Debt Advisor undertook a detailed review of the communication issued to Anthony. It was noted that the balance demanded was broadly in line with the company’s accounts but that this balance did not take into account various transactions which validly related to company expenditure but had been debited to the loan account balance.

These transactions were scrutinised and The Business Debt Advisor was successful in demonstrating that the DLA balance was overstated. Based on the significantly reduced calculation an offer was presented to the creditor in full and final settlement of Anthony’s obligations.

approved Advice solution

The offer was accepted within 3 working days. The parties subsequently entered into a settlement agreement which confirmed acceptance of the offer in full and final settlement of the claim made against Anthony.

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.