ksagroup
Member Since: 17th Nov 2010
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He is managing director of Company Rescue Ltd and KSA Group Ltd - a specialist firm of turnaround practitioners. Keith has been featured in Mike Southon's column in the Financial Times and his book - This is How Yoodoo on entrepreneurs.
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.
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.
My answers
Suppliers are king
Just goes to show how important the continued support of your suppliers are if your business is in difficulty!
Year on Year Show fall on 2010
It should be noted that year on year there has been a fall in the number of insolvencies. There has been a slight increase in the last quarter but it is not a dead cert that insolvencies will rise next year.
Pre packs
Unfortunately in any insolvency many creditors have a "sour taste" in their mouth as their debts are written off. The problem with pre packs is the lack of transparency and when the business is sold to connected parties. Some banks wont allow a sale to connected parties.
It should be remembered that the banks always have first pickings ahead of employees and HMRC and other trade creditors whether it is a straightforward administration, prepack or liquidation.
For accountants
From an accounting point of view the issue of overdrawn directors accounts looms large in liquidation. The reason, of course, is that it is the duty of the liquidator to chase any outstanding debts on behalf of the creditors. If the director has been withdrawing money in the form of dividends when there are no distributable reserves then he/she is in effect a debtor and the liquidator can pursue them for the money. Please see this page on overdrawn directors accounts in liquidation
Yes we have noticed this
We are hearing of more and more instances where this is happening. HMRC have lost their preferred creditor status so are ranked at the same level as trade creditors. In effect they are unsecured creditors. However, as any debt to HMRC is regarded as not in dispute they have other powers to collect their debt. They can take possession of goods under a distraint notice without needing to go to court.
In any distraint action the bailiff cannot take "tools of the trade" as this would mean that the business is irrecoverably damaged.
Might be worth thinking of a DAILY Cashflow
Download our free daily cashflow spreadsheet
http://companyrescue.blogspot.com/2010/09/cash-flow-problems-could-be-solved-by.html
Too many companies leave it too late
As is so often the case business owners do not want to admit they have a problem. A big contract is round the corner, we dont have to pay the tax ontime etc. As Carl says the earlier directors take action the better the options.
This is a list of as many warning signs as we can come up with!
Make sure any Time to Pay is affordable
Make sure that any Time to pay deal is affordable. Make all requests in writing. Also if you think your client can afford to pay off the debt in 6 months ask for 8 months. Things can and do go awry. If you think that the debt is not completely affordable and could be paid off over a couple of years or more then a company Voluntary Arrangement or CVA might be the answer.
As a company voluntary arrangement is a formal insolvency process the "case" is then taken out of the hands of the enforcement department and is referred to the Voluntary Arrangement Service or VAS. Effectively as 100% collection is now unlikely, VAS has to judge whether a CVA is a fit fair and feasible alternative to winding up. Note the last line of the aims of the VAS as published on the HMRC website. They WANT to help rescue viable companies!
It is a fine balancing act
A prepack needs to be appropriate for the circumstances. It has been abused in the past but in our view the regulations brought in by SIP 16 have reduced the risk of abuse.
The problem is that if creditors have 3 days ( as currently suggested ) to object to any sale this will leave the company in limbo and customers and staff may walk. A prepacks main advantage is business continuity and low cost which will ultimately allow a better return to creditors. It should be noted that most banks will not approve a prepack sale to existing directors. Where speed is essential to save a business then we do not see the need to change the process itself. Insolvency practitioners should make proper use of the tools available and many do not consider the use of a CVA as an alternative
HMRC are supporting smaller businesses as well!
HMRC are supporting many businesses with their Time to Pay arrangements. It is estimated that there are billions of unpaid taxes here. However if small businesses are not keeping to the arrangements then the HMRC will get tough and serve a winding up petition!