We are now taking steps to bring the liquidation to a close, of which Mike Fortune and Carl Faulds of Portland Business & Financial Solutions were appointed joint liquidators on 5th September 2016.
The company purchased a business from a third party in 2009 and due to the highly competitive marketplace, significant discounts had to be offered to attract customers and profit margins remained tight. The director continually tried to develop the company’s products to ensure the designs were up to date and worked well with components from the large bike parts manufacturers. The director also reviewed other areas of the marketplace that could be exploited to help improve the company’s profitability and allow it to grow. Due to the tight profit margins and costs of development, the company experienced cashflow issues and required financial support from the director.
Despite efforts to improve profit margins, including reducing overheads by moving to smaller leasehold premises, the company continued to struggle with cashflow issues. The director had run out of personal funds to invest in the company and he tried to arrange for third party investment in order to rescue the company. Despite some initial interest, no investment was made. The director concluded in August 2016 that without the investment, the company could not be rescued in a timescale acceptable to creditors and that steps should be taken to place the company in to liquidation.
Upon our appointment we instructed independent chattel agents to assist with the disposal of the company assets. We agreed a strategy with our agents which would allow for realisations to be maximised. A number of parties expressed interest in the company’s assets and we ultimately agreed a sale higher than anticipated at the outset. We were also able to achieve a sale of the company’s goodwill, which was anticipated to have no realisable value as any goodwill would have diminished as the company had ceased to trade.
We have been successful in recovering higher than estimated amounts from the company’s book debts. We recovered the credit balance held in the company’s bank account and a small insurance refund. The cash held in our client account was transferred to the liquidation bank account.
We assisted the employees that were dismissed as part of the liquidation process to submit claims to the Redundancy Payments Office in order to receive their guaranteed entitlements. We have calculated the consequential preferential claims and have arranged for these to be discharged in full.
Due to the enhanced recoveries during the liquidation, we have been able to agree and pay a first and final dividend to unsecured creditors which is greater than that which was estimated at the outset.
Creditors can find further details in respect of the winding up in our final progress report here.