Utter panic and dread. Please help.

[Weyhands]

Hello, I’m really hoping somebody can help me. I have a Ltd company with three directors. Me being one. No staff as we made them redundant earlier this year. I believe the company is insolvent. We have started defaulting on payments. Managing to delay and pay as much as we can but I think we are now at a critical level. I am having a nervous breakdown with the stress.

I have flagged my concerns a few weeks ago to my other two directors but they do not want to start any conversations with insolvency practitioners.

We have around £70k PG debt across credit cards, funding circle. All so far are just about paid on the monthly payments. One is slightly defaulting.

We have £26k vat outstanding and we misfiled The last return. Which I flagged as I noticed it after it was submitted. We had the £26k on a payment plan but have defaulted 3 times now.

We also have supplier debts like storage, web developers etc

We are an ecomm company and we do have stock worth £83k at cost and £300k at full price value.

I also have £65k owed to me that I added to the business which are on my own personal credit cards. I am going to have to get another full time job to pay this as we have stopped all salaries due to the lack of cash flow.

I believe we are insolvent but my two other directors don’t. I want to resign as I cannot continue in a company where I am outvoted. What the hell do I do? I am so stressed I don’t care about equity or anything I just want to do legally what’s right and not be prosecuted for wrongful trading.

Can anyone help advise what I can do?
Thank you so much

 

[Gyumri]

Hi - You are carrying a lot of stock so perhaps your fellow directors believe that they can trade out of the position, but on the other hand perhaps you are not able to sell it as well as you previously thought.

Provided the company stops running up debts which could lead to allegations of wrongful trading there may still be some basis for continuing to try and trade out of the situation.

It doesn't sound like the other directors want to throw in the white towel at this stage, particularly as PG's have been given.

If you can carry on trading with a view to reducing the sums owed to creditors then it would be worth struggling on. HMRC might get ratty about your defaulting on the agreed time to pay arrangement but there is not much they can do.

If you really don't think you can contribute anything to keeping the company afloat then it may be time to jump ship and that would be especially so if by continuing you are only going to increase the company's debts.

Wrongful trading | RSM UK

RSM’s M&A and private equity team has advised on the sale of Blakedale Limited to Northgate Vehicle Hire Limited.

www.rsmuk.com

 

[ethical PR]

Hello, I’m really hoping somebody can help me. I have a Ltd company with three directors. Me being one. No staff as we made them redundant earlier this year. I believe the company is insolvent. We have started defaulting on payments. Managing to delay and pay as much as we can but I think we are now at a critical level. I am having a nervous breakdown with the stress.

I have flagged my concerns a few weeks ago to my other two directors but they do not want to start any conversations with insolvency practitioners.

We have around £70k PG debt across credit cards, funding circle. All so far are just about paid on the monthly payments. One is slightly defaulting.

We have £26k vat outstanding and we misfiled The last return. Which I flagged as I noticed it after it was submitted. We had the £26k on a payment plan but have defaulted 3 times now.

We also have supplier debts like storage, web developers etc

We are an ecomm company and we do have stock worth £83k at cost and £300k at full price value.

I also have £65k owed to me that I added to the business which are on my own personal credit cards. I am going to have to get another full time job to pay this as we have stopped all salaries due to the lack of cash flow.

I believe we are insolvent but my two other directors don’t. I want to resign as I cannot continue in a company where I am outvoted. What the hell do I do? I am so stressed I don’t care about equity or anything I just want to do legally what’s right and not be prosecuted for wrongful trading.

Can anyone help advise what I can do?
Thank you so much

I would speak to the company accountant if you are not sure if you're trading insolently.

Why did you put company expenditure on your private credit card ?

 

[Weyhands]

I would speak to the company accountant if you are not sure if you're trading insolently.

Why did you put company expenditure on your private credit card ?

Thanks for your reply. I have been a fool and invested personal CC money as I believed in the business so much. We have found it so hard to get external funding so have used this way.

Hello, I’m really hoping somebody can help me. I have a Ltd company with three directors. Me being one. No staff as we made them redundant earlier this year. I believe the company is insolvent. We have started defaulting on payments. Managing to delay and pay as much as we can but I think we are now at a critical level. I am having a nervous breakdown with the stress.

I have flagged my concerns a few weeks ago to my other two directors but they do not want to start any conversations with insolvency practitioners.

We have around £70k PG debt across credit cards, funding circle. All so far are just about paid on the monthly payments. One is slightly defaulting.

We have £26k vat outstanding and we misfiled The last return. Which I flagged as I noticed it after it was submitted. We had the £26k on a payment plan but have defaulted 3 times now.

We also have supplier debts like storage, web developers etc

We are an ecomm company and we do have stock worth £83k at cost and £300k at full price value.

I also have £65k owed to me that I added to the business which are on my own personal credit cards. I am going to have to get another full time job to pay this as we have stopped all salaries due to the lack of cash flow.

I believe we are insolvent but my two other directors don’t. I want to resign as I cannot continue in a company where I am outvoted. What the hell do I do? I am so stressed I don’t care about equity or anything I just want to do legally what’s right and not be prosecuted for wrongful trading.

Can anyone help advise what I can do?
Thank you so much

Thank you, this does give me hope. I am just so burnt out and stressed by it all. I’m wondering what it’s all for. I’m 42, no savings, huge CC debt and a business imploding. I don’t know which way to turn. And I’m scared I will be lumbered with more PG debt. Worked night and day for 8 years on this and it’s crumbling.

 

[japancool]

And I’m scared I will be lumbered with more PG debt.

You can't be lumbered with more PG debt apart from the stuff you have already provided a guarantee for, unless you sign a new PG.

Your £83k of stock is not worth £83k - it's worth what you could get in a distress sale. How much is the *total* debt that the company owes?

 

[WaveJumper]

I will make no other comment other than you all need to get around the table with your accountant ASAP get your heads out the sand and discuss before the wheels fall completely off. Although am I right in thinking perhaps you don't have an accountant ie your misfiled VAT return?

 

[Weyhands]

I will make no other comment other than you all need to get around the table with your accountant ASAP get your heads out the sand and discuss before the wheels fall completely off. Although am I right in thinking perhaps you don't have an accountant ie your misfiled VAT return?

Thank you. Yes we do have an accountant but they made huge error on the last filing but understand it’s the directors responsibility ultimately to ensure it’s filed correct. We just missed this as it’s only me that really understands it but my mental health is shot to bits.

I do not agree with how the business is being run. I spoke to IP yesterday they said that I could just resign. That to cover myself personally I needed to write an email saying that I believed to company to be insolvent and that I have sought advice, the fact that they do not want to contact an IP at all is what I disagree with but I am outvoted 2 to 1. So can I just resign? Aware I will still be liable for PG but I literally cannot bear another hour with how the company is being managed.

 

[Ozzy]

So can I just resign? Aware I will still be liable for PG but I literally cannot bear another hour with how the company is being managed

Yes, you can resign as a director. This does not effect your shareholder, and as the IP advised you - confirm it in writing and your reseaons.

There are also some IPs on here who can help, and I'm sure they will be along soon.

 

[Lisa Thomas]

Sorry to hear your predicament.

Unfortunately you are in a difficult position if your fellow directors do not want to take advice.

There is a risk that another creditor (like HMRC for example) could liquidate the company, especially given it has breached the Time To Pay (TTP) plan.

As a creditor you could liquidate the company in court (or threaten to) if that's what's needed to get them to listen and heed some advice.

Ultimately it may be best for you to resign as a director, thereby reducing risks of claims being brought against you personally if the company enters an insolvency procedure in due course (The Directors conduct will be investigated by the liquidators, who can lift the corporate veil and pursue directors personally if there has been misconduct).

Happy to chat to you about this in more detail if needed, and/or feel free to watch some of my videos.

The Company is insolvent based on what you have said above. An explanation of this can be found here:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

Directors responsibilities and options are discussed here:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

Perhaps consider sharing them with the directors.

 

[UK Contractor Accountant]

Really need to get up to date management accounts prepared together with a cash flow forecast for the next 6 months to see where the company is really at then have round table meeting to discuss options.

With £300K RTV of stock should be looking at discounting to get some cash in quickly.

 

[Newchodge]

Yes, you can resign as a director. This does not effect your shareholder, and as the IP advised you - confirm it in writing and your reseaons.

There are also some IPs on here who can help, and I'm sure they will be along soon.

May I suggest that, in your resignation letter you also invite the other Directors to offer proposals on how the company will repay the money owed to you.

 

[WaveJumper]

Love her videos, but take @Lisa Thomas up on the offer and give her a call

 

[Mark T Jones]

I'm sorry to hear your predicament - but experience says that unless there is a clear & quantified recovery plan, now is the time to bail.

Do so in writing, making your concerns clear.

Contact all PGd creditors notifying them they you are no longer a director and that you PG is limited too the amount currently outstanding. They won't actually agree, but they won't extend facilities further. (Japancool is partially correct - there may be continuing guarantees or headroom in facilities to extend without notifying you).

It's a bitter pill for you, but in reality the business relationship is shot whatever the long term outcome - I'm pretty sure that getting out now is the best options, given your circumstances & state of mind.

 

[MikeJ]

I'd put in a demand for the money lent to the company to be returned in 7 days, or you'll start winding the company up as a defaulted creditor. That may bring them to their senses.

You appear to be working at around 75% gross margin. Can you hold a fire sale to generate cash? You've not said exactly what you do.

 

[Elliot Green]

Thank you. Yes we do have an accountant but they made huge error on the last filing but understand it’s the directors responsibility ultimately to ensure it’s filed correct. We just missed this as it’s only me that really understands it but my mental health is shot to bits.

I do not agree with how the business is being run. I spoke to IP yesterday they said that I could just resign. That to cover myself personally I needed to write an email saying that I believed to company to be insolvent and that I have sought advice, the fact that they do not want to contact an IP at all is what I disagree with but I am outvoted 2 to 1. So can I just resign? Aware I will still be liable for PG but I literally cannot bear another hour with how the company is being managed.

In general terms, a director who resigns when they have a PG exposure leaves themselves open potentially to a PG position worsening.

If a PG exposure can get worse because of how it is set up then in such instances there can be merit in seeking advice on a just and equitable winding up.

 

[UK Contractor Accountant]

maybe a joint & several PG in place?

 

[Mark T Jones]

maybe a joint & several PG in place?

It's probable that all guarantees are joint & several

 

[Lisa Thomas]

Love her videos, but take @Lisa Thomas up on the offer and give her a call

Thanks Wavejumper. That means a lot!

 

[HFE Signs]

Sounds like a lot of stock, may I ask what the stock is? Could this be sold off cheap? Any stock you can convert is going to help

 

[Porky]

@Weyhands if you have not already done so talk to @Lisa Thomas
Not much more to add to this thread you need professional advice. That Funding Circle debt you will be on for, that's a fact. This needs handling right. Credit cards if they were company would go down with the revenue debt and other creditors but sounds like you have card debt in own name. If you can get out, reclaim your cash and get off the funding circle debt great but sounds unlikely so it's really a damage limitation exercise now imo. Company clearly insolvent by the sounds of it. Pick the phone up.
Good luck to you

 

[Lisa Thomas]

Thank you, Porky.

OP - still happy to chat, if needed.