CREDITORS’ VOLUNTARY LIQUIDATION
Poppleton & Appleby were approached by the managing director of a small company which operated in the manufacture of spectacles for small independent opticians.
The company could be traced back over 100 years. However, the proliferation of national chains, including supermarkets, have had a gradual effect of eroding the company’s business.
The director believed the company had reached the end of its life. However, it had four employees with more than 20 years’ service, and it is fair to say were around or even above of retirement age.
- The company was a subsidiary of a group with its book keeping facility in another part of the country as part of the “group”.
- Poppleton & Appleby attended this facility to extract the records.
- The company had a modest debtor ledger.
- The projected redundancy liability of staff rendered the company insolvent.
- The directors had exhausted all options and had little appetite to further support the business or preside over a worsening of the position.
- The directors instructed Poppleton & Appleby to assist in placing the company into Creditors’ Voluntary Liquidation.
- The company ceased to trade, and the staff were made redundant. Poppleton & Appleby assisted the employees and in turn introduced specialists to assist in their claim for redundancy pay and other entitlements.
- Poppleton & Appleby were duly appointed as Joint Liquidators of the company.
- The company’s long-standing staff were able to claim their entitlement from the Redundancy Payments Office who in turn submitted their claims to the Joint Liquidators.
- Recovery of the company’s debtors proved to be successful with around 95% recovery rate.
- Also, as part of their investigations, the Joint Liquidators identified a historic over-payment of rates which enhanced realisations considerably.
- As a result, preferential claims for wages and holiday pay were met in full, and a significant dividend was paid to unsecured creditors in excess of initial expectations.