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
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.
ET Rowlands & Sons
Kelly Burton • Automotive • Administration
Assets from the well-known Telford road haulage contractor ET Rowlands & Sons, which has closed after nearly 60 years in business, are to be sold by auction online.
The firm, known for its striking red livery on its vehicles, provided road transport solutions for UK and continental Europe and operated a modern mixed fleet of rigid vehicles, tractor units and trailers.
Last week’s closure of the company, set up in 1958 by 87-year-old current director Mary Rowland’s father, saw all 28 jobs made redundant after the company lost a major contract and potential hopes for a pre-pack sale were dashed.
Kelly Burton and Lisa Hogg from Yorkshire-based insolvency specialists Wilson Field were appointed joint administrators of ET Rowlands and Sons on 13 June at a meeting of members and creditors.
Wilson Field, have instructed valuers and asset management consultants Charterfields to dispose of the assets of the company, which operated a warehouse facility in Telford.
Vehicles and other items up for sale includes a fleet of 14 tractor units, seven rigid and flat HGVs by Scania, DAF and MAN, 14 curtainside and three flat back trailers, personalised numberplates including P7 ETR, P12 ETR, R4 ETR, S7 ETR, T2 ETR, V2 ETR, and 6 ETR, plant and office furniture. Other vehicles include a Vauxhall Movano 3.5T Dropside and Ford Transit T350 Panel Van.
Kelly Burton, director and insolvency practitioner at Wilson Field, said: “ET Rowlands & Sons was a well-established family run business that experienced loss of a major contract.
“The director came to Wilson Field for advice but regrettably the company entered administration and has been closed. As a consequence all 28 jobs have been lost. It is always sad to see a long-standing company go out of business with the loss of jobs.”
The online auction is now open and closes Tuesday July 4 from 12 noon. For further details visit www.charterfields.com
Precision Engineering Business
Kelly Burton • Construction & Engineering • Administration
A bespoke precision engineering business, working predominantly in the automotive and aeronautical sectors, found itself experiencing cashflow difficulties caused by an increase in costs due to the uncertainties surrounding Brexit, and the loss of a key member of the sales team.
When the company’s largest customer reduced its spending by 50%, the director felt the business couldn’t continue and sought advice from the team at Wilson Field.
Wilson Field marketed the business and assets for sale, and a sale of the tangible assets was completed immediately following the administrators appointment, to an unconnected third party.
Kelly Burton, insolvency practitioner and director at Wilson Field, said:
“With so many complications surrounding Brexit, coupled with the loss of some key staff, the company experienced some cashflow difficulties it could not get out of.
There was a positive outcome in the end as some of the tangible assets within the company were sold, which meant a good return for creditors.”
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