Manufacturing - insolvency case study

• Sector - Manufacturing
• Annual turnover - £10m
• Number of employees – 100+

Situation

Although the Group had undergone some restructuring prior to Mazars involvement, it was insolvent on a balance sheet basis with two key liabilities threatening the future of the Group:

• a defined benefit pension scheme operated by the Group with an accounting liability of circa £5m;
• historic legal claims brought by a competitor of a well-known brand had culminated in an unsuccessful defence internationally.

Approach

Following a review of the Company’s financial position and forecasts, meetings were held with key stakeholders to consider the solvent restructuring options. Whilst these options were explored the pressure on the business continued and an assessment concluded that those options were no longer achievable.

The shares or assets of the business were marketed for sale however assets-only offers were the only ones received. The sale process and administration were approved by the key creditors and a sale of the business was completed securing the employment of all staff.

International Asset realisation

The group had an investment in South Africa which was a royalties income stream for the group.

With the assistance of our colleagues in South Africa this investment has been placed into Liquidation under the insolvency regime in South Africa with a successful recovery of the asset for the benefit of creditors.

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