Please visit https://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Thursday, 26 June 2008

An example of an enquiry for assistance and our response

Sent: 25 June 2008 12:29To: Keith Steven
Subject: Contact Us Message

I wonder if you are able to assist. I am looking to purchase a loss making company (£1.3m historial debts) and in order to achieve the turnaround strategy, I *think* I will need to liquidate the company. In essence I need to relieve the business of some difficult contracts, such as: - (possibly) some staff - premises lease - contract car lease(s) The remainder of the assets, liabilities etc I will want to take with us to a new company. Perhaps liquidating the business is a bit drastic? Perhaps you can help? I am looking for some advice as to whether this is a legal and appropriate approach and to work with someone through the liquidation process (if appropriate). David

Keith's response:

Yes all legal, eminently sensible and there are at least three ways to do this. It just depends on your objectives, the vendor's objectives, any secured lenders requirements and the best tool for the job can be found below.

1. One way requires little or no cash to buy the business, then freeze debts, leverage tax and VAT for 6-10 weeks and then enter the company into CVA this means that some of the future profits are used to pay off creditors. There is no noise of administration or liquidation and you can leverage creditors monies without risking your own. See guides here. http://www.companyrescue.co.uk/company-rescue/options/detailed-cva

2. The second is Administration pre-packaged sale. Here the company is put into admin having lined up an agreed purchaser (you). See guide here: http://www.companyrescue.co.uk/company-rescue/options/administration and click guide to pre-pack flowchart

3. The third is acquire the company then liquidate it having hived down the assets to a new clean subsidiary. See this page for brief guide http://www.companyrescue.co.uk/company-rescue/options/cva-hive-down (albeit this page refers to CVA plus Hive down, the process is the same). See here for detailed guide to liquidation.

So David, I am happy to talk to you about the processes but perhaps an overview of the target would give us a better steer. We do not charge for initial advice or meetings so I suggest you give me a call on 07974 086779 to describe your objectives for the business in more detail? I will need to know the debt structure (secured, tax and VAT and trade) the sector and your plans. You can keep it confidential for now if you wish.

If we both believe a meeting is appropriate we do not charge for the initial meeting. If we are appointed it is against a written agreement as to cost.

I look forward to hearing from you.

DO YOU HAVE A QUESTION?

Email me now keiths@companyrescue.co.uk

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Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

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