The Company traded as a haulage distribution business and was suffering poor cash flow due to increasing costs and poor performance and was under considerable pressure from HM Revenue & Customs due to PAYE and VAT arrears, however, the Company had recently won new contracts and was confident it could be profitable in the future.
After considering all of the options steps were taken to place it into Administration with a view to continuing to trade the business under the protection of Administration and proposing a Company Voluntary Arrangement by way of an exit route to enable the Company to continue trading under its existing management.
In order to achieve a position whereby the Company could trade in Administration it was necessary to agree terms with the Company’s existing factoring Company to ensure funding was in place for the continued trading and as Joint Administrator, following submission of a detailed report and discussion with the funder, we were able to secure continued facilities to enable funds to be drawn down to fund trading activities.
Once trading was stabilised as Joint Administrator I commenced drafting a proposal for a CVA and convened a meeting of creditors for consideration of the proposals. At the meeting of creditors the proposal was approved and under the terms of which the Company agreed to make monthly repayments into the CVA from its future profits for a period of 5 years.
Control of the Company trading was returned to the directors of the Company and the Company subsequently proceeded to make all payments required under the terms of the arrangement and the arrangement was successfully concluded returning payment to unsecured creditors.
Related Case Studies
Contact Begbies Traynor Group
Our Media Centre
Read our latest news, expert opinion pieces and articles covering the the professional and financial sector.