The Company was supported by the Company’s Bank with an overdraft facility and in turn had security by way of a debenture and personal guarantee from the directors.
The Company began trading initially as a broker of refurbished specific computer systems. The Company progressed a few years later into selling enterprise IT solutions and services gaining a wider customer base of business users.
The turnover of the Company in 2014 was in the region of £500,000 with a loss of approximately £50,000.
The Company’s major client was in Scotland. The director received information to say that this client would no longer be working with the Company, or renewing its contract. The reason given was that the client was purchasing outside of the recognised frame work. This was a major blow for the Company, having retained the contract for 9 years.
Unfortunately, poor advice was given to the directors at the time and despite hard work and further investment from the shareholders, including a new investor, a downturn in the economy during 2014 had resulted in the Company running out of cash.
The summer of 2014, was extremely quiet and the directors were forced to put in further personal funding in order to keep the business afloat.
The Company owed the sum of £56,000 to its largest supplier and recognising that the Company was struggling, the director tried to arrange a payment plan with the supplier however the Company was not in a position to sustain the plan. The Company resulted in owing nearly £100,000 to trade and expenses creditors and HM Revenue and Customs and in addition the directors’ were owed sums of £35,000.
The directors approached another I.T Consultant company with a view to selling the business and after negotiation, the assets, which had been professional valued by asset agents, of the Company including the contracts were sold to an unconnected party in the sum of £10,000 plus VAT.
The directors, after seeking advice appointed AABRS to place the Company into Liquidation.