CVL
Successful CVL of Superchips Limited with a dividend to preferential and unsecured creditors.
The challenge
The company was a market leading car tuning business which had been trading since 1977. Due to the ongoing COVID-19 pandemic, the company struggled to remain profitable, turnover had dramatically decreased and the company was forced to cease trading with liabilities of circa £298k. Noticing the urgency of the situation, One80 experts were introduced to the client by their accountant.
The solution
Due to many of the employees having long periods of service, staff claims were significant and in addition, further liabilities were owed to general suppliers and HMRC. It was acknowledged early on in the advice process that the company was a market leader in supplying aftermarket chipping and remapping solutions for vehicles, and a significant value could be obtained for the assets.
Our experts immediately identified all of the available assets which included stock, debtors, plant and equipment and a rolling road which had been installed in the trading premises. They swiftly instructed agents who provided valuations of the assets which allowed our experts to have a more accurate understanding of the company’s financial position.
The strategy was discussed and agreed between the directors, the introducer and One80 in order to achieve the best outcome for all and specifically for the creditors. As part of these discussions we listened to the worries and concerns of the directors so as to reassure them and advise on their statutory obligations, in addition to wanting to make the decision process as stress free as possible. It was agreed that the best option would be to place the company into a Creditors Voluntary Liquidation (CVL).
Successful CVL of Superchips Limited with a dividend to preferential and unsecured creditors.
The strategy was discussed and agreed between the directors, the introducer and One80 in order to achieve the best outcome for all and specifically for the creditors. As part of these discussions we listened to the worries and concerns of the directors so as to reassure them and advise on their statutory obligations, in addition to wanting to make the decision process as stress free as possible.
The outcome
Through a collaborative approach and with the hard work and assistance of the agents and directors, it was possible to market the business and assets of the company prior to the CVL. This resulted in over 30 expressions of interest in purchasing the assets. The business and assets were quickly sold to a third party for significantly more than the break up valuation provided by agents. This means that preferential creditors will be paid in full and all unsecured creditors will receive a dividend from the liquidation in the near future. In this case, good communication from the outset and a solid understanding of all parties involved was pivotal in securing a positive outcome.