Professional Services - insolvency case study

• Sector – Digital marketing
• Annual turnover - £1m
• Number of employees – 10+

Situation

A change imposed by a key search engine relationship, reduced the business’ client base and made services uncompetitive for attracting new business, leading to a requirement for additional investment or a sale of the business.

The relationship between shareholders had broken down. As a result of this, further funding could not be easily raised to meet projected operating losses whilst a turnaround of the business was explored.

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 an assessment concluded that this option was no longer achievable.

The shares or assets of the business were marketed for sale however assets-only offers were the only ones received. A sale of the business was therefore completed securing the employment of all staff.

International office closure in east Asia

The Company had previously operated a branch in east Asia and its operation had been wound down in the period prior to Administration. However, in order to officially close the branch, the Company was required to complete certain administrative procedures, including finalising the accounting and tax submissions in that jurisdiction and closing the bank account with the international bank.

To assist the Administrators with this, our colleagues in east Asia were engaged to carry out tax compliance work, bookkeeping work and to instruct local solicitors to complete the legal documentation in relation to the closure of the branch office and its bank account, respectively.

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