Background
Huntswood Sports and Leisure Ltd are a company with the freehold of a hotel with land, buildings and a golf club just outside of Exeter. With debt in-excess of £2.8M, HMRC had petitioned to wind the company up. Prior to the petition and our involvement, trading operations had been transferred to a separate company. RBS had secured land and buildings but there was still outstanding debt relating to other entities and personal loans.
Rationale
The directors wished to retain a degree of control as they had proposals to settle claims if given time to realise other assets. However, due to the outstanding winding up petition, the company directors were unable to appoint Administrators and the QFC (Qualified Floating Charge-holder) were unwilling to act.
Outcome
We stepped in to assist the company in applying to Court for an Appointment of Administrators with the proposal to exit via a Company Voluntary Arrangement (CVA).
A CVA proposal, if rejected would likely return nil to unsecured creditors (HMRC). However, if agreed, would allow the directors to realise other assets to pay RBS and HMRC in full. In addition, if successful the directors could retain control over Huntswood and may recover connected creditor liabilities if profitable in the future.
