Only fools rush in…
7 July 2021: BRI’s Northampton office was contacted by a director regarding his company’s financial affairs and also a shareholder dispute. The shares were held 50/50, the director holding 50, the other 50 held by a shareholder not involved in the daily running of the company. Given the dispute and financial position of the company, the director wanted the company to be placed into creditors’ voluntary liquidation (CVL).
BRI were effectively given the task to act as a mediator between the shareholders as, if agreement could not be reached, a CVL could not happen. However, having considered matters, BRI were of the opinion that, whilst the company would not be able to continue to trade its assets, if they were realised in an orderly manner, they could provide a significant return to creditors and perhaps an informal deal could be achieved with the company’s creditors to avoid the costs associated with a CVL.
The company’s liabilities were £226K, which included the redundancy costs of the 10 employees totalling £56K.
The outcome, after taking BRI’s advice and guidance, is that all liabilities have been paid in full with a significant surplus available to the shareholders of over £100K. Given this surplus, BRI are likely to be appointed liquidators of the company but in a solvent liquidation, whereby the funds are paid to the shareholders in the most tax efficient manner.
BRI pride themselves on giving the right advice first time, every time. Please call any one of the experienced management team for a free initial consultation in complete confidence and without obligation.