CVL
One80 secured the successful CVL of a recruitment company with a dividend to creditors.
The challenge
Our client, a successful recruitment firm which had been in operation for over 12 years, held a number of contracts in the healthcare sector to supply temporary staff. The company found itself experiencing financial distress following a change in directorship a few years earlier. Our One80 experts were introduced to the client by their accountant who the directors had contacted after realising the company was soon to breach its lending facilities.
The solution
The company was run by two directors, a father and son. Following the son’s succession two years prior, the company had been experiencing financial difficulties. As part of our instruction we conducted a review of the management accounts which showed that one of the director’s loan accounts was overdrawn. In addition, we realised that the company had liabilities, predominately owed to HMRC, in the region of £200k including a £20k overdraft facility with the bank, there were also limited unencumbered assets.
As a result of our findings, a strategy was discussed and agreed between the directors, the introducer and our One80 specialists. As part of these discussions, we listened to the concerns of the directors and ensured that the communication was clear and precise in relation to our explanation regarding the best options for the company, and the implications this would have for all stakeholders.
Following a collaborative approach, which ensured that everyone had a thorough understanding of their options, we initiated proceedings to place the business into a Creditors Voluntary Liquidation (CVL). We subsequently agreed a proposal with one of the directors in which the overdrawn loan account would be discounted and repaid over a period of time with the discounted figure accurately representing their financial position.
One80 secured the successful CVL of a recruitment company with a dividend to creditors.
As part of these discussions, we listened to the concerns of the directors and ensured that the communication was clear and precise in relation to our explanation regarding the best options for the company, and the implications this would have for all stakeholders.
The outcome
In this case, the senior director (father) did not want to continue having any involvement in the business but the other director (his son) did. It was agreed that the business and assets were to be sold to a competitor of the company who was known to the directors. The sale successfully completed and the son now works for the purchaser as an employee. The overdrawn loan account is being paid off on a monthly basis by the former director and the creditors received a small dividend. Following early intervention by the One80 experts we managed to achieve a positive outcome for all which may not have otherwise happened were it not for our quick action.