Administration case study with secured creditor paid in full.

February 20, 2024

The company RR Flexo approached KSA Group as it was having financial troubles.

R.R. Flexo Limited, provided printing and film packaging services for various commercial uses, and was founded in October 1983 as a small family business initially serving the newspaper and magazine mailing industry.

However, the company faced financial challenges due Covid. These challenges include significant HMRC tax liabilities, impacts from COVID-19, increased production costs (notably for ink and solvents, which were in high demand for hand sanitizer products), and additional cleaning expenses to maintain a COVID-safe workplace.

The company had a turnover of £6m


HMRC £500k

Trade Creditors £950k

Secured Creditors Close Brothers had a balance of £800k.

Debtors were £1m.

The company had tried to get a Time to pay deal with the HMRC but it was refused.  As such KSA Group advised the company to use a Company Voluntary Arrangement CVA as a way to restructure their unsecured debt that amounted to some £1.5m.

The proposal was accepted by the creditors with the unsecured creditors getting 40p in the £1 over 5 years.

The company continued to trade in a CVA for 2 years but then unfortunately their largest customer took all their printing in house.  This meant that the company suffered a further cash crunch.  As such, it was decided that to protect the company’s position the directors should file a Notice of Intention to Appoint Administrators.  Notice was served on the charge holders, Close Brothers, and the company was then placed into administration.

Working with the company KSA Group were able to facilitate the sale of the company to an unconnected party.  The price was such that the secured creditor was paid in full after the collecting out of the debtor book.  HMRC, as secondary Preferential will receive approximately 25p in the £1. This is a good overall outcome for the creditors.