Business with Directors at War
Type of Work: Arbitration and Distribution of Cash/Assets to Shareholders
Overview
Following the breakdown of the professional/working relationship between two directors and equal shareholders of a company, their accountant introduced them to My Insolvency. They wanted to discuss the options available to the business, its directors and shareholders.
The directors were equal shareholders of the company and the breakdown of their relationship was damaging the long-term prospects of the business (including, but not limited to the ongoing trading relationships with the company’s customers, its employees, the profitability of the contracts and the overall value in the balance sheet).
Solution
Like a marriage between husband and wife, sometimes the harmony between two parties within a business is lost somewhere along the way, where the parties can no longer stand being in the same room as one another. My Insolvency try to bring the parties together in same way as a marriage counsellor, however this is not always possible.
Due to the severity of the split in the relationship, it was necessary to have separate meetings from the very outset with both of the directors, in order to understand their respective views and opinions, together with their aspirations for the future (both personally and in terms of their business).
Following those initial meetings with the stakeholders, it was necessary to ascertain the future viability of the business and its value.
Result
It was concluded that the parties wanted to extract the value from the business. In order to do this, the business was wound down over a period of time, with contracts being completed, assets sold and staff made redundant.
My Insolvency acted as a mediator (nee arbitrator) throughout this process, enabling the peaceful wind down of the business through a members voluntary liquidation process and ultimately, a distribution of cash to the shareholders.
