Other news

APNs and advising your clients

12th June 2018
1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...

Credit Control – Getting in the cash (cheque or direct debit…..)

23rd May 2018
1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...

There’s too much month left at the end of the money!

8th May 2018
1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...

VVA’s Viable Voluntary Arrangements

29th March 2018
1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...

News archive

Contact Dodd Rescue...

*

*


Appointment venue



News

You asked…we answered

What does “being in administration” mean?

Administration is a legal procedure designed to help rescue companies that have become insolvent. An insolvency practitioner is appointed to run the business to ensure that certain legally defined objectives are met. The main ideas behind administration include allowing the company to continue to trade and saving jobs. Also, if a company perhaps has a “good” part (ie a profitable part) and a loss making part, then the administration procedure can be used to save the good part. asked… You

But what is a “pre-pack”? Are these legal?

Basically yes they are legal. A “pre-pack” is where the insolvent company’s assets are sold very shortly after the administrator is appointed. They’ve received lots of bad press, as it is often the former directors of the company who buy the assets back and immediately start to trade the day after the old company goes under. However behind the scenes, the process is not as simple as it may sound as it is very tightly regulated by the Insolvency Service and other regulators. Anyone thinking this is an easy process needs to think again and make sure they are properly advised by reputable insolvency professionals such as Dodd Rescue.

What is a zombie company?

The definition of a zombie company is applied to any business that is only just surviving. That is, it can pay its current bills and minimum repayments on its loans, but is neither making any significant profit nor making any in-roads into its overall debt. Generally, businesses in this category only manage to cover interest charges on their borrowings. The worry for the zombies is what happens when interest rates do (eventually) start to rise. Also there is a view that says that zombies are in effect tying up assets that could be “recycled” into start-up businesses with the potential to grow. It’s also why there has been a general decline in formal insolvency appointments despite the economic downturn – fewer businesses are going bust and they are hanging on, but not really achieving anything. An MBO (Management Buy-Out) or an MBI (Management Buy-In) basically involves a purchase of the shares in, or assets of, a company by its (or another) management team with the aid of finance from external funders (often a venture capitalist). MBOs/MBIs can often be very high profile businesses being sold for many millions, but can also be used for the change of ownership within a small owner managed business, where the owner wishes to retire but there are no obvious trade players to purchase the business. The key is to have a strong management team either within the current business, or who wish to buy-in to the business, that can persuade the funders that they can grow the business and repay the borrowings that they will take on board to buy the business.

What is a voluntary arrangement – is it true I can write off my debts?

A voluntary arrangement can apply to individuals, partnerships and companies. It’s a formal insolvency procedure, governed ultimately by the courts. Basically, you come to an agreement with your creditors that in return for them not taking insolvency proceedings against you, you will pay them so many pence in the pound in full and final settlement of their debt. Creditors with security ie secured bank loans, hire purchases and mortgages etc are excluded from voluntary arrangements and therefore no, it’s not true that debts can be written off or avoided. Also it’s worth noting that the Office of Fair Trading has recently cracked down on companies that advertise saying that debts will be written off. 75% of your (unsecured) creditors have to agree to any proposals made before the arrangement can go ahead.

Fancy a BIMBO?

An MBO (Management Buy-Out) or an MBI (Management Buy-In) basically involves a purchase of the shares in, or assets of, a company by its (or another) management team with the aid of finance from external funders (often a venture capitalist). MBOs/MBIs can often be very high profile businesses being sold for many millions, but can also be used for the change of ownership within a small owner managed business, where the owner wishes to retire but there are no obvious trade players to purchase the business. The key is to have a strong management team either within the current business, or who wish to buy-in to the business, that can persuade the funders that they can grow the business and repay the borrowings that they will take on board to buy the business.

If you or your business are in any sort of financial difficulty & need ‘real life’ rescue or recovery advice, call: 0800 954 0520