The company had been going for a long time but had made losses in the last five years. The company’s bankers were really starting to put the directors under pressure and had started to reduce the overdraft facility in stages.
We met the directors who were convinced they needed to go into Administration on their accountant’s advice. However when we met them they really wanted to carry on and where prepared to put their own money in to keep going.
We realised that with a ten month time to pay plan with H M Revenue and Customs and a loan secured on property outside of the business and used to clear the bank debt the directors could carry on.
It is important in this sort of situation that the directors are certain carrying on trading is going to improve the balance sheet and not make the finances worse which would leave them open to wrongful trading.
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