Background
- Family run printing and binding company
- Employed workforce of 19 employees including directors
- Annual turnover in excess of £1 million.
- Assets with a book value of approximately £150,000
- The company had a number of large contracts including a lucrative British Telecom contract
Problem
- Company began to face a downturn in trade and sales
- General cash flow problems
- Large contracts lost to competitors
- High wage costs
- Employees threatening tribunal
- The company faced large redundancy costs for staff (in excess of £100,000)
- The company had creditors of over £250,000 including over £80,000 to HMRC for VAT and un-paid PAYE/NIC
Solution
- A member of the Parker Andrews team met with the directors the same day they made contact for initial advice.
- Parker Andrews provided the directors with all options available to them.
- Decision was made to cease trading and formally instruct Parker Andrews to assist placing the company into Creditors Voluntary Liquidation.
- Parker Andrews contacted all creditors, including HMRC, alleviating pressure from the directors immediately
- Parker Andrews dealt with redundancies and assisted employees with their forms to claim redundancy from the National Insurance Fund
- An agent was instructed to sell the remaining assets in the lead up to the liquidation to an unconnected party
- There were a number of book debts collected by Parker Andrews credit control staff
Conclusion
- Company entered Creditors Voluntary Liquidation
- Creditors were informed and dealt with by Parker Andrews
- Employees claims were sent to the Redundancy Payments Office immediately after the company entering liquidation and claims to Employees were paid shortly after
- After all assets realised in the liquidation a distribution to unsecured creditors of 55p in the pound was made in addition to the costs incurred in the liquidation being paid.
- Importantly for the director all stress and pressure was alleviated immediately
