Closure of family business that had been negatively impacted by the Coronavirus pandemic, resulting in a substantial return to creditors
- Sector - Family business
- Annual turnover - £1m
- Number of employees - 8
The family-owned Company had traded for nearly 20 years but with gradually dwindling reserves after the last recession, the Company was not able to withstand the impact of Covid-19. Having shut down during lockdown, the directors took the decision not to re-open.
This was a marginally insolvent company had it continued trading but considering the level of creditor claims and diminished asset values during the pandemic, it was insolvent upon cessation of trade.
We discussed the best way to resolve the Company's position with the director/shareholders.
We thoroughly explored both solvent and insolvent liquidation options and recommended that insolvent liquidation was most appropriate under the circumstances and in view of the directors’ obligations to creditors.
Appointed as liquidators, we instructed agents to manage the asset sale process.
Strong asset values and a simple, well-managed liquidation process have allowed us to make a return to creditors of approximately 50p in the £.
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