Featured Case Study
Heavy Engineering Manufacturer
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 In July 2003, we had a call from one of our top introducers to help them with a very difficult case. They are a highly respected firm of Management Consultants who were undertaking a Benchmarking Analysis of a Family-run Engineering Company. The company fabricated heavy sections for the waste and earth-moving industries. An analysis put this company into the bottom quartile of almost every measurement category. They came to the conclusion that the firm was insolvent.
We were introduced to the owner who was semi-retired. He had passed operating control to a senior manager who was clearly out of his depth when it came to running a £5 million turn over operation with 147 employees.
The bank were owed nearly £900,000 and pressing, there were landlord problems, the Inland Revenue had sent in a bailiff, there was a serious accident claim involving the H&S Executive and the bookkeeper had had enough!
We agreed to work alongside the Consultants to save the situation. They provided operational management whilst we concentrated upon turnaround strategy.
What did we do?
• We immediately took control of cash management. This gave us the breathing space to plan a long term solution.
• We spoke with the Bank, Inland Revenue, HMC&E and key suppliers to enlist their support.
• We proposed a CVA but time was not on our side, so with the agreement of the Bank, we invited a firm of Insolvency Practitioners to put the company into Administration. This stabilised the business and protected the assets for the creditors, as well as the employees and customers
• The I.P.’s agreed that a CVA was a workable solution, but suggested a period of trading in order to generate profits to reduce the secured creditors liabilities. A Creditors meeting was arranged to vote through the proposals.
• The family regained control of the business from the Administrator in October 03. A professional management team is now in place and the business is thriving.
• The latest indication is that the CVA liabilities will be paid off in 2005.
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