More than 5,000 people have contacted KSA Group since Keith launched this unique website in 2000 and over 500 companies have now been directly assisted by the author over the last 15 years with assignments ranging from large multi national projects to small manufacturing companies, to simple advice over the phone.
For example, Keith ran a £500m sales company in an Administration plus CVA rescue in 2004 and that company (now much smaller) survives with sales over £100m or so. Keith has worked with much smaller concerns from £300k sales upwards and he is currently leading the turnaround of a £120m service company, (CVA).
Keith started his career as a retailer and experienced the savage recession of the 1990's first hand. This was before the banks had a planned approach to dealing with SME's failure. Close struggling businesses first; ask questions later was the response then. Of course this was driven by insolvency practitioners who wanted big fees.
So he learned a lot in a short time and thought "how can we help struggling businesses"?
He joined a specialist turnaround firm in London in 1994 and has helped set up two venture capital companies since, specialising in the distressed / turnaround sector. Since then he has focused on driving the delivery of free information to distressed business people and promoting the use of CVA's, innovative administrations and informal turnarounds.
Keith is a former director of the UK Turnaround Management Association and an associate of the Turnaround Finance Group.
There isn't much he hasn't seen, he is an entrepreneur and vastly experienced in turning around companies. Talk to Keith directly if you want.
mainly because they are what is called "involuntary creditors" Also the company is in effect collecting tax on behalf of HMRC so should really pass it on
I am sorry you but you have slightly misread the article. The insolvency rate IS higher in men run businesses and there is little difference in the profile of these businesses in terms of sectors. So there is a story here. So why would the rate (not the pure numbers ) be higher. I am caveating by saying this is not proof that women would be better but it is still a point of discussion.
This is always going to be tricky especially where property assets are concerned. Were their assets undervalued?? The thing is that during the financial crisis assets were in fact worthless for a period of time as no one wanted to buy property. So if a property business got into financial trouble and couldn't pay the bank how much were their assets worth "at that time" Impossible call really.
Loan accounts and directors drawings in an insolvency situation
A further problem that often arises is that loans are used to account for drawings taken by directors in lieu of salary/dividends. This can be a tax effective method of dealing with drawings where a copy reports profits and has distributable reserves. In lean times, it needs to be borne in mind by directors that drawings are usually taken regularly throughout the year whereas dividends are declared in arrears when the annual accounts are prepared. Should the company enter insolvency, this will result in the directors being personally liable for any loans that have been taken in anticipation of future dividends being declared. We have some guidelines on overdrawn directors current accounts on our website.
Corporate Rescue in Scotland
Let's hope that they will consider all rescue tools such as the company voluntary arrangement which is cronically underused in Scotland.
Well, that is where the skill comes in proposing a successful CVA
Yes many people do have too over optimistic projections of growth but then so do many start ups! Many of them fail. Seriously though a CVA has to be "fit, fair and feasible" The creditors need reassurance that the projections of growth are achievable. HMRC are very sophisticated creditors and they wont agree to them if the projections are unrealistic. In our CVAs we ensure that things change. Proper financial controls are put in place, Non executive directors maybe appointed and some directors removed. It is all about change.
Many pre pack sales are not done to the existing directors. In fact banks are reluctant to agree to them if the management do not change radically. A pre pack succeeds if it can inject more working capital into a business so that jobs are saved and the business can continue. It still has to be a better result than liquidation.
At the end of the day the HMRC have no power to legislate. Tax avoidance occurs because of legal loopholes. It is parliament that needs to get a grip. In Australia they have a system where any tax avoidance scheme has to be approved before it is marketed. Here avoidance schemes can be marketed before they are approved or shut down and with such a backlog that looks like it will never happen.
Another simple problem is a technical/legal one. Many schemes rely on the lending of money. So when is a loan not a loan? It is virtually impossible to say " I can prove that you will never repay that money therefore it is income." It is drafted as a loan with no fixed repayment date etc etc etc. Technically it is still a loan but in reality it isnt.
Wrongful or insolvent trading
An example of wrongful trading would be where a company took lots of deposits from customers knowing full well that they would ve very unlikely to be able to honour the contracts but used the money to pay off creditors. Whilst not necessarily fraudulent it is wrong.
Many retailers simply expanded too quickly in the boom years and had too many stores. What is more these stores were occupied on high rents. When there was a slight downturn there was not enough flexibility in the system. Oh and there is the internet.........