Company recovery help & advice
There are both formal and informal procedures to help directors rescue their business and recover their company from a position of financial distress. Options may include sourcing new funding, restructuring the company’s operations, and entering a formal insolvency procedure. The most appropriate route forward for a company, will be dependent its on the debt levels and what the company’s directors are looking to achieve.
How we work
Our objective is to achieve the outcome you desire as a director. To do this, we need to speak with you and analyse your company’s current position. Once you have made contact with us, our initial advisors will establish if there is a way in which we can assist you – we will arrange a free consultation to assess your situation in-depth and provide actionable advice, tailored to your company’s situation, talking you through the most appropriate company recovery options.
Insolvent company recovery options
Company recovery options can range from informal solutions such as sourcing funding, restructuring your business or putting in place a time to pay arrangement, to formal arrangements which require the involvement of a licensed insolvency practitioner. These options are legally binding and can be powerful solutions when required. Here are some of the options that can be considered.
- Company administration
Administration provides a company with protection from its creditors whilst an insolvency practitioner (IP) takes control of the business and the directors’ powers cease. During this period, creditors are not allowed to take further legal action, and the administrator must achieve one of three outcomes:
- Rescuing the company as a going concern, or
- Achieving a better result for the company than if it was liquidated, or
- Realising company property for the benefit of secured or preferential creditors
- Administrative receivership
Administrative receivership is a rare procedure, instigated by creditors who hold floating charges against their debtors when terms of borrowing have been breached. An insolvency practitioner (IP) such as us are appointed to take control of the business and come to an arrangement to recover the debts owed. This is generally done through the sale of assets as a piecemeal process before handing the company back to directors, or through the sale of the whole business as a going concern.
Find out more about administrative receivership
- Enter into a Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement is a structured repayment plan which includes a company’s unsecured debt. A CVA is a common procedure that companies use, allowing them to renegotiate existing debt but continue to trade through. Once in place, all interest and charges are stopped, and creditors cannot take further legal action against you with regards to any debts included in the arrangement. The arrangement will usually last a period of 5 years, and upon completion, any outstanding unsecured debt is written-off.
- Time To Pay Arrangement
Time to pay arrangements are an informal solution but can be ideal for companies who have a good track record with HMRC but have recently run into trouble with regards to payments owed to them. TTP arrangements allow companies to pay outstanding corporation tax, PAYE/NI or VAT liabilities in instalments over the course of either 6 or 12 months. However, HMRC must be confident that your company can make the full repayments before accepting a proposal.
What if company rescue is not an option?
If rescuing the company is not a viable option, directors must consider alternatives to minimise creditor losses and fulfil their legal obligations as director. Circumstances sometimes dictate that company recovery can’t be achieved and the company needs to be formally closed and wound-up. This will involve a company entering into a formal liquidation.
It’s essential for the director of a company in financial distress to seek insolvency advice, as it gives them the best chance of complying with insolvency regulations and their legal responsibilities as a director.
How we can help
The first step is to make contact with us. Once in touch we can talk through your current situation and go through how we can help you. All of our initial advice is free of charge, and our licensed insolvency practitioners are licensed by the ICAEW. The advice you receive is regulated in the interest of what is best for your company.
- Speak with our initial advisers via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth.
- During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available.
- After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
In summary
There are many options available to help directors with a business turnaround and company recovery, the selection of which will be based on appropriateness and the desires of the director. As we have outlined, there are both formal and informal solutions, and an effective recovery strategy may require more than one solution to run in conjunction.
The key to ensuring you recover and achieve the outcome you desire is to act fast and get advice.
Case Studies
Statestrong Limited
Kelly Burton • Manufacturing • Administration, Creditors Voluntary Liquidation (CVL)
Insolvency experts Wilson Field has helped turnaround the fortunes of a loss-making manufacturing company in Lancashire providing a new future for its 80 employees.
Businessman Russell Blaikie acquired the struggling 40-year-old Statestrong Limited, headquartered in Lytham St Annes, through a pre-pack sale and has been able to help the company immediately utilising his expertise in manufacturing and management.
Arrangements for the purchase of Statestrong’s business and assets were negotiated by Sheffield business specialists Wilson Field who affected the sale shortly after being appointed.
The company, which manufactures and supplies aerosol and liquid products for use in health and beauty, household, automotive and industry globally, posted sales of £12m last financial year, but had suffered pressure from creditors with outstanding arrears.
The total value of the deal is undisclosed but includes the business and the assets of the company based on Boundary Road in Lytham St Annes and Tarporley in Cheshire, which will now trade as Statestrong Products Limited.
Mr Blaikie said:
“Transactions of this nature are sensitive and require careful handling. The team at Wilson Field provided exactly the right professional approach.”
Wilson Field’s insolvency practitioners Kelly Burton and Joanne Wright worked closely with Mr Blaikie along with senior corporate case administrator Gareth Kinneavy.
Kelly Burton, said:
“The company had a wealth of expertise but was straddled with financial liabilities which ultimately made its future questionable. Looking forward, a previously distressed business now has a viable future.”
National Videogame Arcade
Kelly Burton • Leisure & Hospitality • Administration
Image from GameCity.org [http://gamecity.org/]
The National Videogame Arcade is a unique national centre which is dedicated to history and development of computer and video games. The museum itself contains many rare and original videogames and consoles as well as a Toast Bar which serves a wide array of toast-based snacks.
Over its time, it has also been involved in working in collaboration with Arts Council England, Times Educational Supplement, Wellcome Trust and the British Library to name a few. These projects and collaborations focused on developing the role of videogames in culture and education.
Home of the acclaimed GameCity festival, The National Videogame Arcade in Nottingham, sadly fell into cash flow difficulties earlier this year despite an increase in its footfall. An eleventh hour investment by a director-led consortium, led by director Iain Simons, saved all 40 jobs at the increasingly popular tourist attraction and museum.
The cash flow difficulties led to the destination being taken into administration, Wilson Field’s Andy Wood and Lisa Hogg were appointed as joint administrators on 19th August 2016.
Andy Wood, an insolvency practitioner at business turnaround and insolvency specialist, Wilson Field, said;
“The investment story behind the consortium is based on the passion that Iain Simons and his staff have for the GameCity project.
“We were appointed as administrators after the company fell into financial difficulties, despite growing in popularity. The consortium of investors could clearly see the potential to turn the business around and with support from the staff, GameCity has a new future.”
Director of GameCity and investment consortium leader, Iain Simons, was very happy with securing the last minute investment and the service he received from ourselves; “The NVA is like no other facility within the UK and is rapidly growing in popularity. It was devastating to us when we realised that the business was in financial difficulty, but we knew it could be overcome.
“I have to give all credit to the staff here who volunteered to work without pay when we announced that the business was in trouble and this undoubtedly allowed us the time to pull together a consortium of investors to give the facility a bright new future and secure those jobs.
“GameCity is rapidly picking up pace and the Toast Bar, National Videogame Arcade and our collaborations with new partners in the UK and beyond are proving to be just as popular as we’d hoped.”
For more information on GameCity visit http://gamecity.org and for further information about our insolvency procedures, call us on 0800 901 2475.
Print On Solutions Limited
Kelly Burton • Service Agency • Administration
A Leeds print company has been bought out of administration saving all 54 jobs.
Print On Solutions Limited was set up in 1999 years ago and went from start-up business to the largest envelope overprinter in the UK with offices in Leeds and Bury, 12 litho presses and six digital presses.
Administrators Kelly Burton and Joanne Wright from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 11 April after the company, based in Century House, Holbeck, ran into financial difficulties following an ongoing dispute relating to a significant contract.
The directors took early advice and the business was sold to new company WEPOS Limited as a going concern saving all 54 employees’ jobs.
Kelly Burton from Wilson Field said:
“Following discussions with the directors, the business was sold to WEPOS Limited as a going concern, safeguarding all 54 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team.”
In 2003 Print On expanded by moving to a 12,000 sq ft, purpose-built factory in Leeds, designed to offer the business a state-of-the-art platform for growth.
The expansion of the group was through strategic acquisitions and mergers of envelope manufacturers. Tower Envelopes in Bury merged with Print On in 2010 and became the Lancashire division.
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