Businesses fail for many reasons, most often as a result of factors beyond the control of its management, such as market forces, changes in demand, cost fluctuations and failings in the supply chain. With Brexit looming, these factors are even more ‘front and centre’ for many businesses.
“On a day to day basis, ‘failing’ businesses factor heavily in my work,” says Robin Koolhoven, a partner in the restructuring and insolvency team at HCR. “I think it’s a shame that the words ‘turnaround’ and ‘reorganisation’ have such negative associations.
“True, there are errant directors out there who are surprised at the breadth of powers available to liquidators to make them accountable, as well as directors who seek to beat the system. But those represent the minority, not the majority – most directors are owner managers seeking to do the best for their company, suppliers, creditors and employees. These are the honest hardworking people who deserve the opportunity to find a solution in troubled times.”
Robin is currently supporting several organisations. Here he shares their stories: “One of my current clients is a large company with loyal management and staff. The core business is good, but it is laden with historic debt, and it is suffering from changes in market demand. Attempts to secure a sale of shares and new working capital proved fruitless. It is fair to say the vultures were circling and HMRC, understandably, wanted a conclusion to the historic position.
“Initially there was interest from parties but the proposed solution would have resulted in a break up. We finally found, with the help of a corporate agent and a national accountancy practice, a willing purchaser who had the ability not only to take the business and employees on, but deliver the money necessary to make it work longer term.
“The result is a sale through administration. The people who helped put this together, the directors, will not be employed by the business going forward, but that was not their aim; they kept the business – one with real potential – alive, and maintained employment for their loyal staff. The return to creditors will be demonstrably better too. This is a commendable effort from the directors, putting themselves last on the list of priorities.
“One of my other current clients is a small family business. After a failed attempt at a voluntary arrangement with creditors we managed to find a solution so this business can continue to operate with its current staff, through a sale via liquidation.
“In my view failure should not be about blame (with some exceptions) but about the opportunity to find a solution. If your business or finances fall into troubled waters, we can offer a lifeline.”
Whatever financial problems you’re experiencing, we’ll help you to find the best way forward, giving you a fresh start and safeguarding jobs where possible.