This case study is an example of how a CVA appointment can become a CVL appointment.
The company was incorporated in October 2003 and provides freight services to the haulage industry. One of the Company’s directors contacted KSA after reading the website. A Meeting was subsequently held between the directors and Keith Steven of KSA.
KSA were appointed to assist the company in October 2010. We were also appointed to liquidate a sister company at the same time.
Turnover for the year ending March 2010 was £1.2m
The company encountered financial difficulties due to:
– Financial difficulties because of a drop in sales.
– Lack of truck resources in Europe after the recession hit.
– Tighter margins.
This case necessitated that KSA liaise with many of the company’s Europe-wide creditors.
– The company operated from licensed serviced offices on a 3 month rolling contract .
– The company employed 9 people including the directors.
Bank & Financial facilities
– There were no loans or overdraft and the bank provided an account on a cleared funds basis
– The company had an invoice finance facility with a fixed and floating charge on which was owed c£90K
Unsecured Creditor debt:
– c£196K of which HMRC was unusually only 10%
Unfortunately, by 4th January 2011, the business had become unviable. Due to the nature of the industry, it became impossible for the company to continue to secure haulage for the contracts. The director therefore engaged KSA to conduct a CVL (creditors voluntary liquidation). The Section 98 creditors meeting took place in February 2011.