Case studies

Manufacturing Company in the Midlands

We spoke with the Company Director of a Manufacturing Company based in the Midlands at 5 10pm on a Monday evening; we established this was an emergency situation as his Finance Company had told him to take professional advice and see an Insolvency Practitioner and had instructed Reporting Accountants, to do an Independent report. They also had a formal meeting booked, where they suggested that the Insolvency Practitioner was present.

“When a Finance Company or Bank wish for any one of the above it is very serious, all the above it is very likely the Company ceases to trade after the meeting”

We effectively did a business review on the phone and the Director explained that they had some quality issues, last year, which had now been corrected, but a cash flow shortage had put too much pressure on the business.

We arranged a meeting for 11 am on the Wednesday morning, due to the urgency of the situation; we took with us a Principle of an Independent Finance Company, who were entirely comfortable dealing with these situations.

The Result

Director, concludes a deal!

“This was much better than I expected, I can look forward to going into work again. My first proper night’s sleep in 6 months”

Staff keep their jobs — Pressure taken off the Directors — Help put in place where it is needed

Terms of the deal available and the Main Director/Shareholder has, real security.

What could have happened?

The Finance Company would have put severe pressure for the Directors to appoint the Insolvency Practitioner who was present, who would have explained the possible consequences of trading whilst Insolvent. Upon there appointment.

The Directors income would have ceased at the meeting, the “Directors Nightmare Scenario” or the Director negotiates with the Insolvency Practitioner to buy the assets from the old company and put them in the new company. If there is one piece of advise we would ask you to take is, do not agree a deal, before taking advice.

The Insolvency Practitioner is highly experienced in this and will do the best possible deal for the Creditors and not you, there will be every likelihood the new Company will have a debt burden and insufficient capital to trade properly and you could face the same nightmare in a years time as you are today.

This is our area of expertise, we can show you the best way forward legally and ethically. We will save you substantial sums of money by providing expertise and finance, we will not charge you an upfront fee for this service, payment is on results.

What would normally happen upon the appointment of the Insolvency Practitioner, in these circumstances.

Finance Company fully repaid, with interest and termination charges and additional fees helping on the debt collection.

The Insolvency Practitioner, is dealing with £600,000 that has been received from the sale of the assets. As the Practitioner is in funds, he can also spend more time fully investigating the conduct of the Directors, if he needs to.

You can put an end to this stressful situation and start sleeping again. Take action today. Call Mark Smillie for a free and confidential discussion about your specific situation and allow us to advise you on the solutions available. 07710466166 out of hours.

Everything can collapse very very quickly, in fact in a matter of days, your monthly salary stops, your staff suddenly turn from your friends to your enemies. Blaming you for their loss of income and loss of a job.

By doing nothing apart from dealing with this yourself, you will be left to deal with;

Loss of income. non payment of household bills, car re possession, mortgage issues, School or University problems.

Facing up to family, friends, work colleagues and the places you go to socially.

Loss of faith and self respect with your family partner and children.

The embarrassment of the Job center, if you have no income.

All because you did not take advice from someone who has been through this a hundred times.

Call Mark Smillie for a free and confidential discussion about your specific situation and allow us to advise you on the solutions available. 07710466166 out of hours.

Ian -Finance Expert at Ringrose and Co writes…

Financing a management buy out

A family owned shop fitting business had underperformed for a number of years. The family had no real interest in the operational side of the business and their preference was to manage at an arms length basis by appointing a series of managers which had had not worked for them.

We were approached by an interim manager who had successfully turned the business around and who realised there was a good potential in the business going forward. The objective he set us was to raise sufficient funds to buy out the family shareholders and retain sufficient stock to build on.

The challenge was that whilst the Asset Based Lending market has many players in the mid to large corporate sector, stock funding at SME level is more of a rarity as most lenders focus only on the ledger.

We successfully introduced a funder who gave the management team what they needed financially and as importantly there was a good fit personally. A degree of patience was then required whilst the negotiations with the family continued, we provided support over this stressful period.

With the deal now concluded the new management have great plans for the future and the facility is designed to grow with them generating more cash as they expand.

Financing a Phoenix

Whilst asset finance is generally known for the financing of new assets it also has its use in securing the future of the business in a formal insolvency as the following case study shows.

An Essex engineering business had entered administration due to the loss of a major contract. The management believed there was still a core business that could salvaged so had spoken to the administrator about buying the assets of the business through a new company they had created. They selected a number of assets that were central to their plans and we organised a valuation. The valuation suggested the assets were worth £120,000 so we set about putting together a finance proposal for 80% of this value being £96,000. The case was approved subject to a number of conditions including director’s guarantees and a landlord’s waiver to avoid any future restraint of goods. Whilst the majority of assets were unencumbered there was a settlement figure of £8000 due so the net contribution to the purchase of the company was £88,000. This sum was repayable over 36 months allowing the new company to spread the cost of acquisition over a reasonable period.

Essential to this product are assets that have some resale value on which to base the valuation and that the lender can get clean title. One of the by-products of this process is that unwanted assets can remain in the old company to be sold for the benefit of the creditors.

Ian -Finance Expert at Ringrose and Co

His awards

Business Rescue Funder of the Year

Insolvency & Rescue Awards

October 2009

Business Rescue Funder of the Year Finalist

Insolvency & Rescue Awards

October 2010

Business Rescue Funder of the Year Finalist

Insolvency & Rescue Awards

October 2011

Business Rescue Funder of the Year Finalist

October 2012

Business Rescue Funder of the Year Finalist

October 2013

Business Rescue Funder of the Year Finalist

July 2014

 

Ringrose – Impartial – Independent – Confidential – Reassuring

To discuss this further, please pick up the phone

 and call Mark Smillie 0800 612 5364, out of hours 07710 466166

Or email us at – info@ringroseandco.co.uk

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