Company Voluntary Arrangement (CVA): Scaffolding Company
• West Yorkshire based scaffolding Company undertaking work for local authorities and providing scaffolding structures at major events.
• Turnover of £1.5m.
• The Company faced severe cash flow problems when turnover fell rapidly following cut-backs in local government spending.
• The Company had also made a significant investment in plant and equipment required to undertake major event projects where it perceived there would be increasing demand in the future.
• The Booth & Co team negotiated with major creditors, key clients and employees to ensure the Company could trade successfully under a Company Voluntary Arrangement.
• The CVA was implemented successfully and unsecured creditors have received 64p in £ to date with the projected dividend being 100p in £.
Adminsitration: Construction Industry Training Company
• Administration of a Construction Industry Training Company based in West Yorkshire.
• Turnover of 1.7m.
• Demand for courses offered by the Company had declined rapidly with the onset of the recession of 2008/09 and reduction in activity in the construction sector which followed.
• However, a Company which supplied powered access equipment expressed an interest in acquiring the business.
• The Booth & Co team worked closely with the interested party, finance creditors and landlord to ensure that a pre-packaged sale of the business and assets was achieved.
• All of the Company’s employees transferred on the sale of the business and the purchaser undertook to complete contracts for training courses which would have been cancelled had the Company ceased trading and gone into Liquidation. This prevented counterclaims for breach of contract which would otherwise have arisen, and facilitated the collection of outstanding debtor balances by the Administrator.
• The liability to the landlord was also mitigated by an assignment of the leasehold premises to the purchaser.
• The pre-packaged sale significantly reduced the level of unsecured claims which would have arisen in a Liquidation, thus enhancing dividend prospects for unsecured creditors.
Members Volutary Liquidation (MVL): Marketing Company
• Creative marketing Company based in West Yorkshire.
• The business had traded profitably for over thirty years and the Directors/Shareholders wished to retire and extract value from the business in the most expeditious and tax efficient manner.
• The team at Booth & Co assisted the directors in taking the steps necessary to place the Company into Members Voluntary Liquidation.
• The Liquidator was able to make an early distribution of funds to the Shareholders shortly after appointment, and the remaining assets were distributed to the Shareholders in specie.
Creditors Voluntary Liquidation (CVL): Manufacturer of Soft Furnishings
• Yorkshire based family owned business which had been in operation since 1982.
• Cash flow had become unmanageable due to a downturn in trade and reluctance of landlord to renegotiate the lease of the business premises.
• Significant arrears of tax and monies outstanding to suppliers. Large liabilities to employees for redundancy and for pay in lieu of notice. Total creditors of over £200,000.
• Booth & Co negotiated the sale of the business, on-going contracts, stock and equipment for £30,000. This ensured that all contracts of employment (including the Directors) were transferred to the purchasing company and the assignment of the lease to the third party. The ex situ value of the tangible assets was minimal.
• The secured creditor and preferential creditors were paid in full and the Managing Director was not required to pay any monies under personal guarantees in respect of the secured creditor or the lease.
• We were also able to resist legal pressure from the secured creditors to pay all of the proceeds of the sale to them under their fixed charge which would have meant that no monies were available to preferential creditors. Despite these issues, the secured creditor was able to recover all of the monies due to them.