I was having my coffee break in the morning at 10:AM when I got a call from a bank manager who introduced me to Collin the owner and managing director for a construction company in the London area. Colin had approached his bank manager to break the bad news to them that he will not be able to pay off his company overdraft of £136,326.00 and needed the advice of a London insolvency practitioner to liquidate his company which had total debts of £613,000.00 of which CIS tax debt was £372,000.00 and PAYE debt another £36,455.00 and VAT debt was around £69,765.00 and the rest was made of other creditors. Hence, why Collin was looking for a London insolvency practitioner to wind up his company. The company also had money due in from work carried out which mounted to £193,700.00
We arranged a meeting and met up three days later at Collins offices in London. Collin had brought along with him his company accountant to make sure the advice he was going to be getting was good and actionable. As I explained to Collin, my duties as an insolvency auditor are to the directors and not the creditors of the company. My responsibility was to help Collin reduce his personal liabilities as well as the company’s liabilities but ultimately priority was Collins personal liabilities, i.e. his bank overdraft and to make sure the tax man does not come after Collin personally for any of the company’s taxes or being prosecuted for wrongful trading.
We spent just over 4 hours getting and reviewing the financial information needed to make the best recommendation for Collin. The first option was to do a CVA better known as a Company Voluntary Arrangement but for this we will need the consent of 75% of the creditors but bearing in mind that the taxman or HMRC were the main creditors, they might go for it or might not. The down side would be that Collin would be tied down for the next 3 to 5 years paying off company debts and other bad point would be that all his future creditors would insist on payments up front without any credit. This would have a major effect on cash flow, and then you would still have the bank to pay back because they had a charge over Collins house for the overdraft.
It was becoming clear by the moment that the only real solution for Collin was to create a strategy for the pr- liquidation in order to reduce or clear the bank overdraft so that Collins house would be safe and saved from all this financial fallout from the company liquidation. We arranged for Collin to register a brand new company and start trading immediately from the new company.
Six weeks in to our strategy, we introduced Collin to one of our approved Insolvency Practitioners in London to take on the liquidation for the company. By this time we had reduced Collins overdraft down to £11,300at which point it was not a major issue for Collin and his house was now safe.
We manage to secure most of the plant and machinery from the liquidator for a very low price for Collin so Collin can continue his new business without too many interruptions. Collin now had a new company up and running with our help and none of his creditor chasing him, all the old debts had died with the old company with the liquidation.
If you find yourself in a situation where you need to find a good London Insolvency Practitioner who will help you then give me a call and I will help you plan a strategy to get you through the maze of insolvency and finding the right Insolvency Practitioner one who will look after you and we will guide you through the whole process, from start to finish, WHY?, because that’s what we do best. Call us on 0800 24 0800
Moe Nawaz: Insolvency Auditor - Published Author - Mastermind Strategist
Filed under: INSOLVENCY
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