Mr and Mrs X started a furniture making business which traded successfully for the first five years.  Unfortunately, due to adverse market trends, the business went through a number of bad years until the business became unable to pay its debts as and when they fell due.

New working practices were introduced to the business in an attempt to make it more profitable.  However, the debts had increased to £30,600 and the couple were paying £733.00 a month just to service this debt.

In the autumn of this year the couple contacted Wilson Field for help and advice.  We advised the couple that the best way for them to resolve their debts would be through an IVA.

Using the information provided, Wilson Field prepared a proposal outlining what the couple could afford to pay back; they now owe only a small percentage of the original debt and are paying this back interest free over five years.  The IVA allowed them to keep their home,  vehicle and business which now trades from a position of strength.

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Company X; a fashion retail store, began trading in December 1998 from rented accommodation near a busy city centre.  Although the company was limited the landlord required the rent to be personally guaranteed.

The Company’s financial difficulties began in January 2001 when the local authority commenced road works very near the shop.  Although the works were only scheduled to last for a maximum of six weeks they actually continued for nearly nine months.

The store was situated yards from where the main bulk of the work was being carried out and this resulted in a considerably reduced footfall.  Turnover decreased by 50% or more and the Company had increased difficulty in meeting its commitments as and when they fell due.

Since completion of the works the company has returned to profitability, but unfortunately it was not possible for the remaining historic debts to be settled, which by this time had risen to almost £50,000.  On top of these historic debts was £5,000 owed to the landlord in back rent.  In August 2003 the Company sought the advice and help of Wilson Field.  We advised the Company directors that the best way for them to resolve the debts and continue trading would be through a CVA with a separate negotiated deal for the back rent owed.

Wilson Field were successful in preparing a proposal with Company X to enable the CVA to be accepted and they now owe only a percentage of their original debt.  The separate deal for the rent allowed the company to pay back the back rent over an eighteen month period.  The proposal allowed the Company to continue trading with its current suppliers on a ‘cash on delivery’ basis.

For more information on CVA's, click here

Liquidation

Company ABC, a kitchen and bathroom wholesaler, began trading in 1986.  The directors’ wages had always been high, but this had never been an issue because the company generated large profits and paid its creditors as and when they fell due. However, due to a similar business opening nearby in early 2001 the profits fell dramatically, but the directors’ wages were not reduced in line with this change.

Over the course of a twelve month period the Company experienced escalating problems with creditors.  The Company finally took action when its debts totalled £70,000 and they were no longer able to pay their liabilities as and when they fell due.

The directors contacted Wilson Field in June 2003 for help and advice.  We advised them that the best course of action would be to proceed into a Voluntary Liquidation (also known as a Creditors’ Voluntary Liquidation).

The Company had assets to the approximate value of £60,000 in the form of stock, and this  had an estimated auction value of £10,000.  From our negotiations with the Official Receiver the directors were successful in buying back the stock at £10,000 with an additional £2,000 payable in respect of goodwill to the creditors.  The existing contracts and the work in progress were transferred to a new company which is now trading from a considerable position of strength.

For more information on Liquidation, click here