Some of our recent projects:
Interim Manager of a Charity
A partner from our Restructuring Services team was appointed as Interim Manager, by the Charity Commission over a large Christian charity with assets in excess of £20 million, operating from approximately 100 churches across the UK and with an aggregate congregation of many thousands. The charity was part of a wider global group. In addition to dealing with extensive PR issues, the role involved taking over the day to day running of the churches’ activities, including but not limited to cash management, property management, strengthening internal controls including financial reporting and introducing operational policies and procedures.
Our work involved resolving a number of management and reporting issues within the charity and regularising and investigating a number of issues and concerns raised by the Charity Commission. During our tenure in office we helped organise large rallies (at the O2 Arena, for example) completed significant building projects and settled a large tax investigation. After 20 months managing the charity’s affairs we were delighted, following our appointment of a new board of Trustees, to hand the restructured charity to the new board in anticipation of a successful long-term future.
Divided Board with possible insolvency issues
A solicitor introduced us to one of their clients, a director of a company where half the board members were litigating against the other half. The division had distracted the board away from their business which was suffering and was on the brink of insolvency. We assessed the financial position of the company and made recommendations to the directors that the company would require a formal insolvency process unless the focus returned to the business, rather than the conflict. We drew the board’s attention to the implications of an insolvency upon their investments in the company, and suggested that the business be prepared for a sale so that the directors could go their separate ways. Despite the fraught scenario, we gained the trust of the whole board. The company has returned to a more secure financial footing, generating positive cash flow and with the short-term goal of a company sale looking achievable.
We were approached by an accountant to advise their client, which had dissolved their former trading company with debts owed to the director and a connected company, HMRC and the company’s bank. The company had no assets, but within days of the dissolution a substantial refund was unexpectedly received. Due to the company’s dissolution, the refund would have been bona vacantia, and none of the company’s creditors would have been repaid. We advised that the company be restored to the register and then put into creditors’ voluntary liquidation, to allow a distribution to be made to all the creditors, including the director and the connected company. This allowed a far better financial outcome to arise out of the windfall than would have been the case.
Compromise with Creditors
Owner managed manufacturing business
We were approached by the finance director to assist a company which had suffered from the crystalisation of a contract loss and a cash flow deficit within a short space of time. We assisted the company in assessing its options and the likely outcomes and issues arising from each of those options, leading to our recommendation to enter into a compromise with the company’s creditors. The company was then empowered to proceed in proposing a compromise with its lenders and creditors, which following negotiations, was accepted. The company was therefore able to continue to trade having stabilised its debt repayments employment of the company’s workforce is protected and creditors will receive a much greater return under the compromise than had the company been forced into a formal insolvency process by an aggrieved creditor.
Solvent Hive Out
Owner managed veterinary business
We were instructed to assist the owners of a successful company which had a number of different business activities. An assessment had been undertaken which identified that the business could develop further as stand-alone units and we therefore assisted in developing a strategy and process to achieve a hive out of those businesses. The plan was implemented and concerns of key stakeholders addressed to ensure a smooth and efficient process. The individual businesses are now operating as stand-alone companies pursuing the best approach to expand
Independent Business Review
We were engaged by the Company to undertake a review of its business. The Company is a long-established and profitable automotive supplier which had suffered from a shortfall in working capital due to sudden growth in excess of its forecasts. We worked closely with the company to adapt and upgrade its cashflow forecasts to identify its funding requirements and identify the gap between those currently available and those required to enable efficient trading practices. Our review enabled the management of the company to engage effectively with its secured lenders to discuss ways to increase the working capital funding to the company and in addition, the company explored alternative options to increase the funding available. The company entered into a new finance agreement which met the company’s working capital requirements and allowed it to benefit from a more efficient procurement process.
We were instructed by an AIM-listed group to evaluate and assess potential exit strategies, both solvent and insolvent, of disposing of a subsidiary engineering business in the Oil & Gas sector. With annual turnover in excess of £8m and with over 120 employees, the decline in the oil price and resulting order book left the business in an unviable and distressed situation.
Working closely with the local management team, we undertook an options review to appraise the various exit routes, evaluating the financial impacts and funding implications for the parent in different scenarios and highlighting key risks in respect to contract fulfilment, employees, suppliers and property realisations.
We designed and implemented an orderly wind-down strategy, encompassing contingency planning, critical cash flow forecasting and monitoring. Throughout the process, we participated in negotiations with key customers, helping to reach settlements to preserve continuity of supply, protect against counter claims and finance a solvent closure. Our work resulted in the full repayment of secured creditors (c. £3 million) and minimised the parent company’s net funding exposure.