CORPORATE RESCUE - FINANCIAL IMPROVEMENT DEBT MEDIATION

Running a business whilst fire fighting cash-flow difficulties and pressing creditors is very challenging but voluntary arrangements/liquidation can jeopardize years of hard work causing more problems than are solved, with continued trading, obtaining credit, and control of the Company being some of the areas of concern.

We provide a helping hand to Companies with a hole in their finances enabling them to trade out of difficulty and remain in business. We can also assist with Company recovery, corporate finance, debt re-structuring/mediation (usually to 30 - 70% of the original amount), and with dispute resolution, venture capital, factoring, stock finance, sale/lease back, and business sale/ acquisition.

Our service is usually self-financing, and is always 'no-win - no fee'

Business Advantages

• No up-front fees
• Success-orientated fee structure, normally self-financing
• Speed - most cases amicably settled within 1 - 3 weeks
• Informality - no involvement of the Courts or public records
• Flexibility of settlement (particularly helpful in cases including the Crown)
• Ability to tailor our assistance to your requirements

Further support was not possible for this distressed proprietor. Personal problems and lost business caused by a former partner had contributed to liabilities of £51k with the Inland Revenue and VAT, who were unsympathetic, requiring immediate payment in full, threatening distraint and bankruptcy.

Time to pay arrangements of 9 and 6 months respectively were negotiated, comfortably in line with cash-flow, negating the necessity for increased borrowing.

TOOL MANUFACTURER

Lightning had struck twice for this phoenix with a bad debt of £170k!

The preferentials were poised to enforce collection of their arrears through winding-up proceedings.

Their bank, Accountants and Solicitors recommended they liquidate being of the opinion that in such circumstances it was likely no blame would be attached to the Directors for this action.

However the Directors were not comfortable with this, believing their customers would not necessarily be as sympathetic ‘a second time’, and that more problems would be caused than solved by insolvency. They wished help to stay in business and trade through their difficulties.

Additional financial support was obtained subject to and following the agreement of the preferentials for ‘time to pay’.

TELECOMMUNICATIONS

This under-capitalised Telecommunications sector Company’s cash-flow had a large hole following a seasonal lull and an expensive legal battle, which, even though the action to date had been successful, had drained resources.

Previous arrangements and dealings with the preferentials made the Directors believe the likelihood of agreement with them to be fairly slim.

We prevented legal action (which most probably would have jeopardised imminent investment capital) and structured their arrears comfortably in line with cash flow.

ENGINEERS

Personnel problems, bad debts and lack of working capital placed this Company in a situation with 5 days left before bailiffs implemented their instructions to remove assets distrained on.

The Company would not have been able to survive this, notwithstanding the issued claims from other sources. The Directors emphasized that all advice received from other sources had been to liquidate but did not wish to lose years of hard work.

We provided the assistance requested, i.e. help through a difficult period, with internal re-structuring, additional finance and agreement with the creditors.

CONSTRUCTION CONTRACTOR

A partner had been left with substantial debts, contractual problems and no cash. With unlimited liability and pressing creditors whose patience had expired, the future seemed hopeless.

The creditors finally agreed that their best interests were served by allowing them time to trade out of difficulty and continued their trading relationships.

SOFTWARE COMPANY

This young high-tech Company was under-capitalised, over-trading. Reduction of some of their debts, structured, to an average of 58%, with a consequential bottom-line improvement of £42k, helped persuade investors to place additional funds in the Company.

OLD ECONOMY MANUFACTURER

We were asked to assist this manufacturing Company by their Solicitors. The Company had been sold by a major group and the heavy gearing, substantial R&D costs and certain financial irregularities had all contributed to severe cash-flow difficulties with substantial pressure from secured, unsecured and preferential creditors.

The order book was strong and their cost break-even level had been exceeded enabling incremental business to be very profitable. Overhead and operating costs were reduced and creditors were initially contained and then structured over 18 months enabling application to be made for re-financing with specialist funders.

ABATTOIR

We were asked to assist with a 9 month old phoenix that had just spent £120k on modernization. The shut-down had caused a further deterioration in their trading position and the decision 3 weeks earlier to cease slaughtering had reduced turnover substantially.

Creditors were pressing and their Accountants formally advised them to cease trading. We structured the preferentials, and improved their bottom line by £25k (reducing their trade creditor indebtedness by 50%, payment in line with cash flow, varying between 12 & 18 months).

CONSTRUCTION CONTRACTOR

We were asked by Chartered Accountants to assist their Client where refusal of a time to pay offer by a preferential together with the return of their post-dated cheques and a statement that winding-up proceedings were being issued 2 days hence compounded their threatened position with pressing, impatient, trade creditors.

Structured payments were agreed with the preferential and indebtedness to trade creditors was reduced by £270k, whom the client, in the main, continues to trade with. We were asked to comment on the business/structure and a number of those suggestions have been implemented.

ENGINEERING COMPANY

Bad debts of £170k had caused a 'large hole' in the finances of this £2m turnover Company. Re-financing and structuring of creditors enabled them to trade out of their difficulties and remain in business.