Company: Recruitment Company – Building sector
Type of Work: Administration and Pre Pack
Overview
My Insolvency were introduced to the board of the recruitment company by the company’s bankers (“the Lender”), following some significant bad debts being suffered.
The lender was concerned that the board was not communicating properly with them and had failed to provide the necessary level of comfort for them to support the business in the long term.
The board agreed to the instruction of My Insolvency to act as advisor on specific aspects of the company, including but not limited to the ongoing liaison with the lender.
Solution
Following a review of the business, it became apparent that the bad debts had a massive impact on the future viability of the company. The directors were concerned about their exposure to personal guarantees provided to the lender.
The company had an underlying good client base, however, it was crippled by the uninsured debts which had turned bad. In order to maintain the remaining business, it was necessary to manage the business with the support of the lender and key creditors.
My Insolvency worked with the board and the lender to ensure that contractors were paid on ongoing contracts, customer relations were maintained and the directors of the company did not breach their statutory and fiduciary duties.
It was clear that the company needed to go through a formal insolvency process and My Insolvency assisted the board in this process. My Insolvency hand held the directors to ensure that they complied with their statutory duties.
Result
My Insolvency were instructed to assist the directors in forming a new company to successfully acquire the business from the insolvency practitioner on a going concern basis. With our help and guidance, they managed to:
- Save jobs
- Maintain the historical relations with the customer basis
- Reduce the level of exposure under personal guarantees
