Closing an insolvent business and re-opening with same/similar name

Discussion in 'Insolvency' started by MRW, Apr 15, 2019.

  1. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Hello everyone

    my situation is almost identical to a recent post on this site apart from the fact that I don't have the funds to appoint a IP

    I have a limited company that has been running for over 25 years, I took over the company around 10 years ago expanded the company and over time, cleared almost £80k of its debts, recently (8 months ago) I emergency fostered three very young children (a 2, 3 and 4 year old) and took my eye off the ball with the company, while going through the fostering process.
    in the run up to this we have had a really hard few years (I've put £60k of personal family loans back into the company to keep things floating).
    the people I left in charge while I've been going through the fostering process have made bad decision after bad decision, costing the company thousands, a few of the staff took advantage of me not being around also wasting thousands and we've also recently been scammed out of nearly £20k by someone pretending they were the VAT man.

    my debts , to suppliers and HMRC is all now well over due and I've run out of time and options to try to continue, my accountant advised me to use the "sponge bob plan" which I'm sending out today.

    my goal is to try to keep a company running keeping me and my staff employed and at least fulfill my existing contracts, this way I can try to recoup some of my personal debts, and customers don't end up out of pocket.

    in the mean time I've sold all assets and contracts of my company to another limited company owned by a family member and will approach suppliers today to ask them to sell existing bespoke products already made to the new company.

    I've borrowed this bit from the other post (sorry "LMH") as the answers given to him were to discuss with a IP , which I cant afford, is there anyone who could answer these ?...

    I am really confused by conflicting advice on what is legal or not. So my questions are:

    - Is it legal to liquidate the Oldco, and then continue trading from the same address under the Newco?
    - Is it legal to keep using the old or very similar trading name under a different registered company name?
    - If not and I want to keep the trading name, what about having a friend or family member as director of the Newco?

    the company wouldn't survive a complete name change which is why I'm keen to keep it, as we only trade on reputation, if I can keep it I could probably create a future for it and the staff, I've never lived a lavish lifestyle, have always worked hard and have only ever taken a modest wage, no one could look at my lifestyle and say I've squandered my money.

    any help would be most apricated

    MRW
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    14,605 3,121
    If you want to keep the name and assets of the old company then you really need to use a liquidator to do things properly.

    If you get someone else to act as director then you really should have nothing to do with the new company.
     
    Posted: Apr 15, 2019 By: Scalloway Member since: Jun 6, 2010
    #2
  3. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Hi Scalloway, simply cant afford a liquidator, the assets have already been sold (a few weeks ago)to new Company (owned by family member) for the amount they lent me (about the price of the assets) I would only ever be an employee of the new company, if we can keep it going
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    13,174 1,441
    So what happened to the money from the sale of the assets? Oldco has money to pay creditors / pay for liquidation?
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #4
  5. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,819 332
     
    Posted: Apr 15, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #5
  6. MRW

    MRW UKBF Newcomer Free Member

    17 1
    there was no "new" money from the sale of the assets, they were sold for the amount previously loaned to the old company
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #6
  7. Mr D

    Mr D UKBF Legend Free Member

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    Then were they actually sold?
    Or was an illegal preference for a particular creditor done?
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #7
  8. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Hi Lisa
    thanks for your input …

    it does look like we have a preference of re-payment, although this was done weeks before the decision to cease trading was made and was necessary to get the company to this point, although I guess id never be able to prove that ?

    no professional valuations … the only real main asset was a company van and some old computers, all worth a lot less than what was owed, based on current forecourt values and eBay... technically a good business deal ?

    we have a long good history with the landlord, we actually pay for the months rent at the beginning of each month, so nothing owed.

    I wont be a director of the new company, at best an employee but possibly just a contractor ? ill look into phoenix regulations
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #8
  9. MRW

    MRW UKBF Newcomer Free Member

    17 1
    it was done weeks before deciding to do the spongebob plan (haven't actually done the plan yet) it would most definitely look preferential, although it was only done to keep the wolf at the door from feeding
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #9
  10. Mr D

    Mr D UKBF Legend Free Member

    13,174 1,441
    Actions can have a price. You realise any investigation into directors conduct goes back some time?
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #10
  11. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,819 332
    Mr D - There is no end date for misfeasance, we just need to prove insolvency ;-)
     
    Posted: Apr 15, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #11
  12. MRW

    MRW UKBF Newcomer Free Member

    17 1
    all I can hope for in the event of an investigation, is they would find any wrong doing simply bad/uneducated business decisions, and show leniency, any investigation would show I've not done anything to simply line my pockets, as I am personally no better off for it.
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #12
  13. Mr D

    Mr D UKBF Legend Free Member

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    You haven't gained from having a job...?
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #13
  14. MRW

    MRW UKBF Newcomer Free Member

    17 1
    fair point, if it was just me I would walk from it all, but without me the company would have zero chance and therefor be more people unemployed
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #14
  15. Mr D

    Mr D UKBF Legend Free Member

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    And the other creditors could see matters different from you, like where is their share of the money?
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #15
  16. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Gone with the old company ... There money would be legally gone when old company ceases to trade... at best they could supply already bespoke made products to new company so not at a total loss.
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #16
  17. Mr D

    Mr D UKBF Legend Free Member

    13,174 1,441
    Their money is gone by preferential treatment of one creditor.
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #17
  18. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Mr D ... You are correct, but it is what it is, we’re not talking huge sums, they would have a 5 year old van and 5 very basic computers worth less than 5k to split amongst themselves but I’m guessing after liquidation and agent fees there wouldn’t be anything left for them at all.
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #18
  19. Mr D

    Mr D UKBF Legend Free Member

    13,174 1,441
    So its only around £5k that you could be liable for.
     
    Posted: Apr 15, 2019 By: Mr D Member since: Feb 12, 2017
    #19
  20. MRW

    MRW UKBF Newcomer Free Member

    17 1
    Yes
     
    Posted: Apr 15, 2019 By: MRW Member since: Apr 15, 2019
    #20