Electrical Wholesaler in deep water

[Stewbow]

Hi
My position is that my ltd company owes £30k to creditors and has a £25k overdraft, supplies are
coming to a stand still and so therefor are sales.
There might be as much as £5k worth of stock (full retail value).
The SpongeBob plan seems interesting, but feel dodgy about removing the stock from the premises.
What would be the situation if I just sent out the letters and just locked the unit and walked away?????

 

[MBE1]

To help with the overall picture, how much are you owed by clients?

 

[Stewbow]

There is an Invoice Factoring arrangement in place, so any money owed will be sought after by the bank

 

[Scalloway]

What would be the situation if I just sent out the letters and just locked the unit and walked away?????

Are your premises leased?

 

[Ian J]

Do you think that your company has a future if the creditors could be held at bay for a while as if so it might be worth considering a CVA

 

[Stewbow]

Yes, and payment is a couple of months behind

 

[Stewbow]

Do you think that your company has a future if the creditors could be held at bay for a while as if so it might be worth considering a CVA

no, additional funds have been put into the business and have just been gobbled up, we should have started this procedure then I suppose.

 

[Scalloway]

If there is stock it may be worthwhile speaking to a liquidator, £5,000 is about enough to cover their fee. Many offer a free consultation that might help you see the best way out.

 

[Overmyhead]

Having been involved with a company that went down the liquidator route (admittedly many years ago) please take care when appointing one - there are some excellent ones and some downright charlatans out there... I'm sure the friendly ones on here will be happy to give some initial advice but the devil is always in the detail and it's very easy in my view to be seduced by the "sign up here and it will all go away" approach.
If you decide "Spongebob" is more appropriate to your circumstances then there are some excellent people on this forum to provide advice and guidance however there is quite a lot you will have to do yourself and be prepared for.
Best of luck regardless and I hope all goes well.

 

[Bob]

Spongebob plan won't really work in view of indebtedness level. Have you given any personal guarantees?

 

[Stewbow]

Spongebob plan won't really work in view of indebtedness level. Have you given any personal guarantees?

The £25k overdraft will have to be repaid apparently. This we'll have to deal with.
But with regards to the £30k owed to suppliers etc, no single supplier is owed more than £4000, why won't the Spongbob plan work?

thanks

 

[Bob]

Maybe @Ian J can comment on the likely action that would be/will be taken by invoice factoring company and perhaps @Spongebob could add his comments. Clearly my comment is just my opinion

 

[Lisa Thomas]

You could try the dissolution route - there is the chance creditors will object to it leaving you at square one. However as part of that process you will need to advice that the Company has insufficient assets to pay for liquidation, which is not true if the estimated stock value is correct. If you lock the premises and walk away you are at risk of the Company being Liquidated and the Liquidator potentially pursuing you for misconduct in one shape or form for leaving the landlord with the Company assets. There is also a very slim risk that the Company can be reinstated any time within the next 20 years and Liquidated and again Liquidator will investigate why you did not Liquidate your insolvent Company.

You may also want to check you have not give the landlord a PG.

Liquidation would be the tidiest route if the Company can afford it.

 

[Lawyer James]

What is the estimated value of the company's debtors which you refer to above?

 

[Lisa Thomas]

The Factoring Co will step in and take over collection of the debt to which they will add interest and termination/breach charges.

 

[Rebeccastein]

Hi Stewbow,
Have you thought about protecting your assets first? How much of your own money have you invested into the company?
Ask your accountant how much personal investment you've stumped up in the form of a director's loan. My company can protect your investment through our directors investment protection scheme. This would mean you would get your investment back BEFORE any liquidators and other creditors.

If you want to get in touch to discuss further, my email is: rebecca 'at' skm-assets 'dot' com
(Sorry, the forum can't post my email address)
Best regards,
Rebecca

 

[Lisa Thomas]

Hi Rebecca

Out of interest how does your investment work to give a Director preferential status in an insolvent situation please?

 

[Mark T Jones]

Hi Rebecca

Out of interest how does your investment work to give a Director preferential status in an insolvent situation please?

And why does your website not give the basic business information required by law?

 

[Ian J]

If you want to get in touch to discuss further, my email is: rebecca 'at' skm-assets 'dot' com
(Sorry, the forum can't post my email address)

According to Whois the ownership of the domain name is hidden behind a privacy registrar and my normal advice to people contemplating dealing with an anonymous website has something to do with bargepoles

 

[Rebeccastein]

And why does your website not give the basic business information required by law?

What website are you looking at? There's another company called SKM which doesn't belong to us which may have given you a 'dodgey' website you speak of. We're located in Wetherby, so by searching SKM Assets 6-8 Bank Street in Wetherby, it should give you a google business that'll direct you to a website which is adhered to by the law.

 

[Ian J]

Ask your accountant how much personal investment you've stumped up in the form of a director's loan. My company can protect your investment through our directors investment protection scheme. This would mean you would get your investment back BEFORE any liquidators and other creditors.

A littler investigation shows that SKM Asset Management is owned by the Emadi brothers who's restaurant business Jack Spratt (UK) Ltd went bust a couple of years ago and the statement of affairs shows Som Eadi being owed £56,000

Did he not use his own scheme

 

[Rebeccastein]

Hi Rebecca

Out of interest how does your investment work to give a Director preferential status in an insolvent situation please?

There is a piece of legislation which states that if the director can claim personal investment in fixed assets then they can receive the money before liquidators. In order for the DIPS to work, the debenture needs to be protected against fixed assets and not floating. There are been case studies whereby Insolvency Practitioners have had debentures overturned because of insufficient evidence to show the initial funding was raised for fixed assets.

 

[Rebeccastein]

A littler investigation shows that SKM Asset Management is owned by the Emadi brothers who's restaurant business Jack Spratt (UK) Ltd went bust a couple of years ago and the statement of affairs shows Som Eadi being owed £56,000

Did he not use his own scheme

Hey Ian,

Thanks for your in-depth research into the company directors. Yes, it is owned by the Emadi brothers. They were not privy to this scheme at the time and I am sure they would have used this fantastic tool if that was available. You speak of liquidation like it is a rarity, thousands of people liquidate their company every year- this scheme is designed to help give the business owner a fighting chance of retaining their initial investment. It also acts as leverage against the aggressive policies of IP's. If you want to discuss further, then please do not hesitate to get in touch.

Best regards,

Rebecca

 

[Rebeccastein]

Furthermore, this is not some scheme which we have invented off our own back. It is available through companies house that any member of the public can access.

 

[Mark T Jones]

What website are you looking at? There's another company called SKM which doesn't belong to us which may have given you a 'dodgey' website you speak of. We're located in Wetherby, so by searching SKM Assets 6-8 Bank Street in Wetherby, it should give you a google business that'll direct you to a website which is adhered to by the law.

It gives no indication of the legal entity or ownership, which is required.

 

[Mark T Jones]

Furthermore, this is not some scheme which we have invented off our own back. It is available through companies house that any member of the public can access.

Can you please point me to where Companies House make the scheme available?

 

[Rebeccastein]

Can you please point me to where Companies House make the scheme available?

Hey Mark,

By putting a debenture in place, a director is able to effectively put a first charge on the company assets. This is in order to regain the initial director investment.
Please feel free to ask an accountant or IP if you can protect your assets in this way as it is clear you believe what we are doing is trying to hoodwink people.

Best regards,

Rebecca

 

[Ian J]

Rebecca - My law is very rusty but I was under the impression that a debenture was to secure new money and you couldn't take one out having realised that the company was insolvent and your directors loans were at risk

 

[Rebeccastein]

Rebecca - My law is very rusty but I was under the impression that a debenture was to secure new money and you couldn't take one out having realised that the company was insolvent and your directors loans were at risk

Ian- it seems that your law is rusty. Yes you are correct, a debenture is to secure new money, but you can invest further money and then take out a debenture to cover the total amount. You are correct the company can not be insolvent, but if it is still bringing in sales (regardless of the value) then it is not deemed as insolvent but I am unaware by the information provided by the initial business owner who started the thread, if sales have completely halted or just declining.

Ian J- if you would like to discuss this further over the phone, I am happy to give you a call to discuss tomorrow morning?

Best regards,

Rebecca

 

[Lawyer James]

"You are correct the company can not be insolvent, but if it is still bringing in sales (regardless of the value) then it is not deemed as insolvent..."

Sorry but that is just incorrect.

"There is a piece of legislation which states that if the director can claim personal investment in fixed assets then they can receive the money before liquidators."

Which piece of legislation are you referring to? The fact that secured charge holders get paid in priority to liquidators / unsecured creditors?

Please don't take my questions as a criticism; I am intrigued by your comments.

 

[Rebeccastein]

"You are correct the company can not be insolvent, but if it is still bringing in sales (regardless of the value) then it is not deemed as insolvent..."

Sorry but that is just incorrect.

"There is a piece of legislation which states that if the director can claim personal investment in fixed assets then they can receive the money before liquidators."

Which piece of legislation are you referring to? The fact that secured charge holders get paid in priority to liquidators / unsecured creditors?

Please don't take my questions as a criticism; I am intrigued by your comments.

Hey James,

I am certainly not an IP, however if a company is still trading then they are still paying off their debts. With regards to the legislation, I have already stated that it is a debenture. This can easily be found on companies house.


Best,

Rebecca

 

[Mark T Jones]

Hey James,

I am certainly not an IP, however if a company is still trading then they are still paying off their debts. With regards to the legislation, I have already stated that it is a debenture. This can easily be found on companies house.


Best,

Rebecca

Your knowledge and terminology are at best confused, at worst deliberately misleading

Your website is anonymous and doesn't conform to basic legislation

Your contributions to the forum are exclusively about promoting this scheme which may or may not be legal, and which may or may not stand up to scrutiny.

Personally, I would avoid.

 

[Stewbow]

HEELLLPPPP my thread's been hijacked

 

[Rebeccastein]

Your knowledge and terminology are at best confused, at worst deliberately misleading

Your website is anonymous and doesn't conform to basic legislation

Your contributions to the forum are exclusively about promoting this scheme which may or may not be legal, and which may or may not stand up to scrutiny.

Personally, I would avoid.

Hi Mark,
I'm confused. Can you expand on such ambiguous comments? The only point I've been confused is by you suggesting that I am about a business that is really straight forward. Furthermore, all the information has been supplied to you to go conduct your own investigation, if you wish.

Our website isn't anonymous, and neither is our business. We're on companies house, a verified business on Google and the only disclaimers we have are stated on the website, and in no section does it state 'we swindle people'... Nor do we. Which I think has been a running commentary that you want to turn into fact without truly looking into what we do. Furthermore, I think it's amusing that a user can scrutinise another business over a website, wheres yours for 'Fit out Finance'?

They are legal. It does stand up to scrutiny as there have been case studies that prove so. But, I know how easy it must feel for you to come on a forum and slander - many 13 year olds do it too. But this post was to advise, not at any point did I promote the business or ask for the user to sign up - I suggested to speak to their accountant and if anything, promoted myself to be a source of knowledge they could use to see what options they had.

Now, if you'd like to discuss SKM further, I'm only a phone call or email away. I'm sure if you were to discuss, you'd be pleasantly surprised.

Have a lovely day Mark,
Rebecca

 

[Lisa Thomas]

There is a piece of legislation which states that if the director can claim personal investment in fixed assets then they can receive the money before liquidators. In order for the DIPS to work, the debenture needs to be protected against fixed assets and not floating. There are been case studies whereby Insolvency Practitioners have had debentures overturned because of insufficient evidence to show the initial funding was raised for fixed assets.

The funds need to be advanced prior to the charge being in place otherwise it can be overturned as invalid.

I don't think there are any fixed assets owned by the Company referred to in this particular post?

Why would the Director want to incur personal debt by taking on a personal loan at a time when his Company is insolvent?