Live Recoveries was approached by a director for advice after the company’s accountant had raised concerns over the trading figures and the overall solvency of the company.
The family owned company was experiencing a significant reduction in turnover as a consequence of a national firm opening an outlet in close proximity to the company’s place of business. The trading premises was owned by the company, subject to a mortgage which had been personally guaranteed by its director.
As a result of these events the director had taken the decision to retire and sought advice on the appropriate method of winding down the company. As a consequence of the reduction in turnover and subsequent financial issues, the company was no longer solvent. The company entered into Creditors’ Voluntary Liquidation and the trading premises were vacated and marketed for sale.
After active marketing of the premises, an alternative use was identified. The premises were sold and the mortgage was settled in full, employee’s claims were paid and a substantial distribution was made to the company’s unsecured creditors. The director’s personal guarantee did not need to be called in.