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
Designer Recliners Limited
Kelly Burton • Manufacturing • Administration, Company Voluntary Arrangement (CVA)
A Sheffield furniture manufacturer and upholster has relaunched offering a smaller, more specialised range of products.
Anico Interiors Limited, which included reclining chairs for the elderly, had suffered cash flow problems and issues with profitability.
Designer Recliners Limited, managed by director Nick Wall, has purchased the assets and business of Anico saving all 11 jobs.
Andy Wood and Robert Dymond from Sheffield business turnaround experts Wilson Field were appointed joint liquidators on 8 June and advised on the sale of the 14-year-old company, based on Orgreave Crescent at Orgreave Industrial Estate, as a going concern.
Andy Wood, associate director and insolvency practitioner at Wilson Field said:
“Historically, the company offered a wide range of products but has now streamlined its offer to customers and cut out some unprofitable lines, as well as re-vamped its web site.
“Directors took advice from Wilson Field with the business sold to new company Designer Recliners Limited as a going concern, safeguarding all 11 employees’ jobs. The new company will offer the same service and standards under the same management team but focus on a smaller range of specialised products.”
The company employs skilled staff including upholsterers, seamstresses and cutters and was set up in 2002 by Nick Wall.
ARB (Sound Vision Light Power) Limited
Kelly Burton • Leisure & Hospitality • Administration
Wilson Field has secured a new future for a Banbury headquartered events management company, which boasted clients including Crufts, Tour of Britain and Virgin London Marathon after it was bought out of administration.
ARB (Sound Vision Light Power) Limited was established in September 2014 and specialised in event hire including providing audio visual solutions equipment, hire and installation.
The company, which traded from Coton Cottage, Chacombe near Banbury, called in administrators from Sheffield-headquartered Wilson Field for formal insolvency advice.
The company, which has an impressive client list and relied solely on sub-contractors as and when needed, suffered VAT and HMRC issues as a result of a period of illness.
Kelly Burton and Lisa Hogg from Wilson Field were appointed as joint administrators on February 20 and concluded a pre-packaged sale of the business and assets for an undisclosed sum to ARB Motors Limited, lead by the same management team.
Kelly Burton, director and licensed insolvency practitioner at Wilson Field said:
Wilson Field was brought in to look at the situation of the business.
The focus on the company had diluted during a period of illness of one of the two directors. A debt was due to HMRC and a repayment proposal was rejected resulting in the need to protect the business and assets via a formal insolvency procedure.
The pre-packaged sale means the business, which was an established player in event management at large scale events, has a bright future moving forward.
The loss of a major employee’s input through illness can harm an organisation and it is important for businesses to seek help should this arise. Timing is essential to keep focus on the business.
ARB has combined experience of more than 100 years and provided hire equipment such as indoor and outdoor PA systems, single and double-decker commentary units, street sound vehicles, exhibition TVs, stage lighting and mobile power in both primary and secondary distribution.
Principal Packaging Ltd
Kelly Burton • Service Agency • Administration
Sheffield administrators Wilson Field has helped save all 14 jobs at a Lancashire packaging supplier and manufacturer after it was bought out of administration.
Administrators Kelly Burton and Joanne Wright from business turnaround experts Wilson Field were appointed joint administrators on 17 February after Principal Packaging Ltd suffered cash flow problems.
The company, based at Pit Hey Place in Skelmersdale, was one of the main independent providers of quality packaging for the retail food industry, and major food and dairy suppliers.
Directors Tracy and Richard Sharratt took early advice and the business was sold to new company Surepac Ltd as a going concern saving all 14 employees’ jobs.
Kelly Burton from Wilson Field said:
“Historically, the company offered a holding service to its customers. This meant that it held a significant amount of stock at any one time, which tied up a substantial amount of cash.
“This created cash flow problems and was exacerbated in the early part of 2016 when the amount available on the company’s funding facility was reduced.
“Directors took early advice from Wilson Field with the business sold to Surepac Ltd as a going concern, safeguarding all 14 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team”.
Principal Packaging, started in 2006, served packaging needs for meat, fish, horticulture and poultry sectors throughout the United Kingdom and Ireland and traded successfully in the early years.
It gained a reputation for being one of the most professional, yet affordable, companies in a competitive market with its high-quality paper, plastic or board packaging, custom print services and high customer service levels.
Free Consultation
Request a free confidential telephone consultation from 9am - 8pm, 7 days a week.
