Creditors Voluntary Liquidation 1
The company involved operated a specialist restaurant and due to its success the director had opened a second restaurant within a year later. Unfortunately the second restaurant was less successful than the first and incurred significant trading losses which were being funded by the first restaurant.
In an attempt to make the second restaurant profitable, the director and a key member of staff from the first restaurant focused their time on the second restaurant. Unfortunately the problems at the second restaurant continued and the ongoing losses put at risk the company as a whole. Cash flow deteriorated to the point where suppliers would only supply if paid cash on delivery.
Faced with the failure of the company the second restaurant was closed and the director was referred to us for advice by one of our existing clients. We established that although the lease to the second restaurant was in the company’s name, the lease to the first restaurant was in the directors personal name. This meant that the director personally controlled the premises to the first restaurant and so would be able to continue trading even if the company failed. A valuation of the assets owned by the company was obtained and the director entered into an agreement for the purchase of the assets at this valuation. The business was transferred seamlessly from the company to a new company set up by the director and all jobs were saved.
The company was placed into liquidation and its affairs have been properly dealt with. The director was then free to focus on the first restaurant which is successfully moving forward.