What are the benefits and drawbacks of a pre-pack liquidation sale?

The directors of a  previously profitable crane hire business approached Wilson Field for advice following a significant downturn in turnover. The drop-off was caused by the nationwide lockdowns following the outbreak of Covid-19.

The business relied upon several large UK-based housebuilders for their income, who were also negatively impacted by the government restrictions.

The Directors attempted to restructure the business to minimise overheads. However, a winding-up petition was issued during this time, and with no funds available to pay the debt due, the Directors approached Wilson Field to explore the option of a pre-packaged administration.

After an extensive marketing period, a sale of the business and assets was achieved to an associated company, and saved all the jobs at the business.

Director and insolvency practitioner Kelly Burton said:

“The business was severely impacted when the country went into lockdown as lots of regular clients, were themselves unable to work and generate income. However, after working with the directors, we arranged a pre-pack administration, which saw the business and assets purchased, with all of the company’s employees keeping their jobs.”

Jobs have been preserved at a Leeds-based group of claims companies after they were bought out of administration in a pre-packed sale.

Care Home Claims and MS2U worked with customers who had been mis-sold financial products and services including PPI or had been over-charged on care home fees.

Joint administrators Kelly Burton and Lisa Hogg from Sheffield-based Wilson Field were called in by the directors when the group faced financial difficulties.

The business and assets of the companies were sold, for an undisclosed sum, to Acquire Inc Ltd. As part of the deal, 32 employees of an associated company transferred to the purchaser.

Group managing director Joseph Battle said:

“Problems were encountered as a result of an unprofitable contract and accrued HMRC arrears which lead to a severe cash flow shortage. We took professional advice and worked with the administrators to enable the business to continue as a going concern and preserve jobs of existing staff. Despite this being a very difficult time, the outcome means the business can continue.

“With the same management team, we can assure clients the same high level of service in the future.”

Kelly Burton, director and insolvency practitioner at Wilson Field, added:

“These companies ran into difficulty following the over calculation of work in progress on a contract, coupled with an accumulation of HMRC arrears. The directors contacted us for advice and have worked closely with us to achieve this result.

“We are pleased that the restructuring of these companies has resulted in the businesses continuing to trade via the successor business.”

Advisors from Yorkshire’s Wilson Field have saved 12 jobs at a Darlington low load haulier after it was bought out of administration.

Transcar Trading Limited specialised in collecting and delivering motor vehicles nationwide with its main clientele including major car dealers Bristol Street Motors, Lookers and Knaresborough Vauxhall.

The company, which traded from rental premises at Lingfield House Darlington and Macklin Avenue, Billingham, called in administrators from Sheffield-headquartered Wilson Field to look into the ongoing viability of the company and advise on a turnaround strategy.

After set up in 2015, it had experienced rapid growth within the last 12 months of trading and, coupled with a number of uncollected and disputed invoices, had created cash flow pressures and a build-up of arrears to HMRC.

Kelly Burton and Lisa Hogg from Wilson Field were appointed as joint administrators on November 27 and concluded a pre-packaged sale of the business and assets to Transcar Logistics Limited – wholly owned and managed by one of the directors and shareholders of Transcar Trading.

Kelly Burton, director and licenced insolvency practitioner at Wilson Field, said:

“As a result of the pre-packaged sale of the company’s business and assets to Transcar Logistics, 12 of the company’s 18 employees were transferred under TUPE, minimising preferential claims in wage arrears and accrued holiday pay.”

Valuations and advice on asset disposal was handled by Robert McArdle of David Currie & Co with legal services and advice from solicitors Ward Hadaway.