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Easing a Stressful Liquidation

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

Employees
19
Turnover
£1m
Assets Value
£150k

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

Ready for Expert Guidance?

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services Creditors Voluntary Liquidation

Understanding the complexities and challenges of Liquidation, Parker Andrews provides comprehensive assistance through the Creditors’ Voluntary Liquidation (CVL) process. A CVL is initiated by a company’s directors to cease trading and liquidate the company, offering an orderly method to close down a company facing insolvency.

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