Residential Conference Centre
A Residential Conference Centre based in the Midlands, this client had up to 20 staff and specialised in providing conference and banqueting facilities. They were making healthy profits until 2008 and the recession began making its impact. This had a series of negative effects for the business because their clients began making cutbacks on their expenditure, resulting in the company directors having to make cuts on staff numbers and other overheads. Any attempts to refinance failed because the bank’s security had devalued due to the recession.
Symptoms:
- Substantial debts had amassed but future confirmed bookings indicated a return to profitability
- Bank threatening to withdraw facilities
- Creditor pressure increasing due to unpaid historic debt
Solution:
- CVA Proposal put forward offering 55p in £ over five year period
Key Advantages:
- Binding creditors into CVA removed all creditor pressure
- Bank happier as no more judgments being registered against company and CVA engendered better prospects of trading within agreed facilities
- Company could continue trading and prospect of property value returning to previous levels hence good for bank and directors who Personally Guaranteed the debt
- Staff jobs preserved
- Goodwill preserved and customers did not therefore lose deposits for pre booked events that would have occurred in liquidation
- No requirement to investigate circumstances regarding the insolvency of company
- Prospect of 55p in £ as opposed to 20 p in pound forecast if company went into liquidation
If your business is facing similar circumstances, contact us now on 0845 468 2395 or visit our contact page.
