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Saving a Business when a petition arrives


  • Company traded as a children’s play centre
  • Turnover of £400,000  
  • Employed 4 staff
  • Assets of £15,000



  • Largest creditor was HMRC, owed £73k for unpaid VAT and PAYE
  • Other trade creditors of £15,000
  • Petition to wind up the company issued by HMRC received – hearing due to be heard in 30 days
  • Creditors accrued because the centre was forced to close for 3 months due to a collapsed roof 



  • Immediate action was taken to review the sustainability of the Company without the debt – the core business was viable
  • Contact was made with HMRC to explore options of a payment plan – this failed as HMRC demanded all of the arrears to be paid prior to the hearing date
  • Parker Andrews were instructed to place the company into Creditors Voluntary Liquidation (“CVL”), allowing the business to be marketed for sale
  • A sale was agreed with the Liquidator upon appointment – far in excess of the likely break-up value of the assets
  • All staff were retained and transferred to the purchaser, therefore no redundancies and far lower level of creditors in CVL compared to a compulsory winding-up
  • Parker Andrews instructed a solicitor to attend the hearing to have the petition dismissed as the company had entered CVL prior to the hearing date – this was granted



  • Company entered CVL rather than Compulsory Liquidation
  • The petition to wind up the company was dismissed
  • Business assets and goodwill purchased at far higher value than likely in a Compulsory Liquidation, resulting in a dividend to unsecured creditors
  • Jobs saved after all members of staff transferred to purchaser of business
  • Creditors were informed and dealt with by Parker Andrews
  • Sufficient funds realised to allow a dividend to unsecured creditors
Parker Andrews

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