Michael Fortune and Carl Faulds of Portland Business & Financial Solutions were appointed as joint administrators of Westcott Design Limited on 27th July 2016.
The administrators are now able to provide their proposals to the creditors, the report can be found here
The textile design business commenced trading in 1994 and was incorporated in October 2001. The company traded as Westcott Design Limited and Appaloosa, from a studio in London.
The company had traded successfully for a number of years. It traded with buyers from around the world and was well established with a good reputation. The company had seen a downturn in sales in recent years, although it was thought that the market would recover over time, cuts needed to be made to ensure the company could continue to trade through the situation.
In an attempt to cut costs the company undertook several rounds of redundancy, these redundancies were costly and put significant strain on cash flow. All non-essential spending was cut and the director loaned the company money to keep it solvent until such time that the cuts made could begin to have a positive impact on cash flow.
The company’s situation worsened. Sales continued to fall and it was apparent the cuts made were not sufficient to stabilise its current position. Employees of the company had not been paid for a few months and freelance designers were also waiting for payments of designs that had been sold. There were insufficient funds to meet liabilities as they fell due and with a large creditor of the company threatening legal action it was clear, that despite all efforts, the company could no longer continue to trade.
In June 2016 the director approached Portland Business and Financial Solutions. After explaining the options available to him it was clear that the company was insolvent. The director concluded the company should enter administration and that Michael Fortune and Carl Faulds be appointed joint administrators.
Immediately following their appointment the joint administrators took steps to safeguard the company’s assets. Chattel agents have been instructed to manage the valuation and sale of assets. The remaining staff of the company were made redundant and have been provided with the necessary information to claim funds owed to them through the Redundancy Payment Office.