The Company had relationships with some national house builders as well as smaller Companies. They had experienced cash flow issues due to slow paying debtors and this meant that they had fallen behind significantly with HMRC, the Bank was overdrawn and the Directors had invested some funds.
The Company had work in the pipeline with existing contacts and could be profitable without the historic debt.
We reviewed all of the options available and the Directors felt that the most suitable option was to place the Company into Creditors’ Voluntary Liquidation and buy back the assets and goodwill.
In doing so, the Directors offered to collect the debtors as they had the continuing relationships with the clients which meant that the debtor realisations were maximised. It also meant that the employees all kept their jobs.
The Directors had the support from the Landlord, who agreed to assign the lease to the new Company and also the support from the clients going forward.
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