15 February 2019: It is not uncommon for us to come across people who say they want advice on the financial position on their company when, in fact, they have already formed a view on their preferred solution. More often than not these solutions involve a process which would result in a fee income for BRI.
However, this isn’t always the case as in the example given below:
Within the last few months a recently widowed director, her dearly departed also having been a director until his untimely death, came to speak with us to discuss the financial position of her company, for which she now bore sole responsibility. Her view was that the company needed a formal insolvency process, as quickly as possible, so that she could start to put some of her recent trauma behind her. During our discussions, it became clear that the company was indeed insolvent and that swiftly placing the company into liquidation was certainly an option.
However, by taking some time to understand the bigger picture, it was evident that the greater underlying problem for her was that of her own personal financial position. The director had not appreciated that personal guarantees she had given in respect of the company would crystallise upon the company entering liquidation, leaving her in a precarious position that would likely culminate in her bankruptcy. The only winners in that scenario, it would seem, are the insolvency practitioners appointed as liquidator and trustee in bankruptcy!
We assisted the director in formulating an informal proposal for the company’s creditors, which had the effect of maximising returns to creditors, as well as opening up some less drastic options in respect of the director’s personal affairs.
In the end, we didn’t earn a fee from the company, nor the director, but we’re not in it for the fees – we’re here to provide the right advice, first time, every time regardless of fee income for ourselves.
If you or your client need a little helping hand in exploring solutions to any corporate or personal financial problems, don’t hesitate to get in touch with our experienced management team.