Background
At BRI Business Insolvency and Recovery we endeavour to rescue a business wherever possible rather than close it. The options available often arise from the desire of the directors and shareholders; they express whether they want to continue and rescue or to close. In this particular case, based upon the circumstances of the company and the client’s preference, there was no alternative but to cease to trade.
Within this case study, we’re going to walk you through the insolvency process of our client. If you’re considering insolvency for your business and would like more information, please contact us.
The Client Company Background
We were introduced to this company via its internal accountant. It installed PVCU windows and doors to the retail sector in the Midlands.
The business suffered during Covid which impacted its cash flow and it never really recovered. Turnover did increase but not sufficiently and that combined with an increase in its manufacturing costs made it difficult to continue to trade profitably.
They decided it was time to start the insolvency process and enlisted the help of BRI.
BRI Business Recovery and Insolvency’s Remit
BRI Business Insolvency and Recovery were instructed to assist the directors in closing the company. Our team of insolvency practitioners assisted the employees of our client and maximised the asset realisations of the business with a view, if possible, to paying a dividend to creditors.
The Insolvency Process with BRI
A formal insolvency process is a highly technical legal procedure and a lot of information about the business needs to be collated, but at BRI we also recognise the human element. This is where BRI go above and beyond. We talk to our clients and understand what they need, where their concerns are and if there is anything we can do to help not only physically, but also emotionally.
Liquidating a business is an emotional journey and we recognise that. Our team are kind, approachable and here for you at this difficult time. Please contact us if you require support.
Here is the process this particular insolvency case followed.
Initial Insolvency Stages in Preparation for Liquidation
The company’s directors provided the requisite information in order that BRI Business Insolvency and Recovery could assist and fully prepare for the liquidation. This included the preparation of a statement of affairs. This detailed the assets and liabilities of the Company together with a list of its creditors.
Employees’ Redundancy and Claims
As the Company was in the process of being liquidated, the employees were addressed in person and made redundant. We advised and assisted the employees in making their claims to the government for monies owed to them.
The Company’s Assets
The company traded from a leased site in the Midlands.
We instructed an independent agent to value the assets. On their recommendation an auction took place on site, following the liquidators’ appointment and the landlord was approached to ensure that we could carry this out. The auction was successful and realised over and above what the assets were originally valued for.
Creditor Claims
Together with assisting creditors with their claims and any queries they had, we dealt with a number of retention of title claims. If a company’s trading terms and conditions permit, then they can claim a product that was supplied as theirs, if it has not been paid for, even though it has already been supplied as title (ownership) has not passed regardless of who holds the product.
Next steps and dividend to creditors
Following receipt of the auction monies, the liquidators will ascertain whether there are sufficient funds to enable a dividend to be paid to the company’s creditors.
The outcome of this Insolvency Process with BRI
Prior to and during this liquidation there are a number of stakeholders to consider, to liaise with and to work with, whilst we undertake the many parts of this project. Crucially we appreciate the importance of dealing with employees in a timely manner to ensure their statutory redundancy entitlement was paid promptly and therefore minimise the adverse impact of this liquidation of staff losing their employment – this was one of the top priorities of the director. We also realised funds over and above what was originally expected to allow a return of monies to the company’s creditors.
Work with BRI
If you know of any director that would benefit from advice on Insolvency solutions please contact us. Our team can help with any form of business closure; from on selling a distressed business to orderly wind downs and everything in between. Please reach out to any of the BRI Business Insolvency and Recovery management team who will be able to offer a confidential, free and without obligation meeting to discuss.