Individual Voluntary Arrangement with new Limited Company
The Partnership provided courier services to the local business community and was doing quite well. Unfortunately the untimely death of one of the partners meant the dissolution of the business and the remaining partner was left with substantial bank debts and tax liabilities of around £222,545. The local Council had sent in its own Bailiffs and was threatening to seize the company goods in lieu of business rates for around £13,450. The partnership had eight employees and 8 vans on lease with the remaining partner having personal guarantees. The remaining partner had supported the business heavily with personal and business credit cards and personal borrowings in the region of £55,000.
OVERALL DEBTS TO THE COMPANY: £222,545 – COMPANY TURNOVER: £560,000 – EMPLOYEES: 8
We discussed all options available with the remaining partner and his professional business adviser who had called us in. Once we collected all the information we needed from the personal and business sides we were able to assess the situation more clearly as we had an overall view. The situation on the face of it was dire and there were no simple solutions and there were risks whatever the choice. However having identified what was important to the partner and explained the risks we agreed a plan and we put it into action immediately. It was plain that with the death of the partner a lifelong friend who had worked for the partnership now played a critical role in the day to day running of the business.
We started up a new company within 24-36 hours and had a bank account in place for all new business. As there was no asset value in the vans we transferred the vehicles across to the new company removing the threat of the personal guarantees. The partner’s home was in a negative equity situation so there was no threat to the family home and so the director entered into an Individual Voluntary Arrangement.
We agreed a Trading IVA with Creditors and the client.