Background
Committed 2 Communications Ltd were a £5M turnover telephone fundraising business, primarily acting for national charities. Following a period of media attacks on the charity sector, significant regulatory changes occurred and charities had to cease charity funding activity.
Issue
This led to reduced turnover, where 60% of the company’s competitors closed and significant investment in compliance and transparency led to cash flow pressures. The company were left owing in-excess of £1.2M.
Our team of corporate insolvency specialists were first introduced by the company’s lawyers in January 2017 to provide specialist advice on the company’s cash flow position and options.
Outcome
We proceeded by engaging in two phases; Phase one saw us review financial forecasts and engage with the company’s ten largest creditors to gauge appetite for a Company Voluntary Agreement (CVA). Through a collaborative approach with the company’s accountants we were able to prepare forecasts and devise a refinancing plan.
Phase two saw us prepare a CVA proposal and convene a meeting on whether to accept. The CVA was approved in February 2017 and the company refinanced with a supportive new lender allowing us to forecast a dividend to unsecured creditors of 56p in the £ rather than £0 in a Liquidation.
Our effectiveness and collaborative approach impressed the solicitors and accountant who were able to retain their client.
