The Background
Fibre Solutions was a contracting company based in Henderson. It had twenty staff and a good business with two large customers.
There were five shareholders and one director who had made a number of very poor commercial decisions and had run up substantial debt, including a substantial debt to the IRD and an oversized fleet relative to its current needs.
The company was insolvent due to a number of past decisions but was, on a month-by-month basis trading at a marginal profit. It was unable, however, to service its historical debts and the financial costs on the redundant vehicles.
Our Appointment
Waterstone was approached on the Friday, early in 2008. The company had been served liquidation proceedings and the director had failed to bring this to the attention of the other shareholders. We worked over the weekend with two of the five shareholders who wanted to try and salvage the business.
On the Monday Waterstone was appointed. We dismissed the existing staff and re-employed them on temporary contracts. The customers were notified and work continued. Our in-house team drafted a sale and purchase agreement and our insolvency team negotiated the value of the assets and a sale with the two shareholders who wanted to continue.
The Sale
The firms customers terminated its contracts on the Tuesday, concerned that work being done by a company in liquidation would not be covered by warranty or insurance. Twenty staff were, at this point, out of work.
Waterstone valued the business and drafted a sale and purchase agreement, settled negotiations with the fleet creditors and had the business sold by lunchtime on the Wednesday, at which time the employees were re-hired and sent back out to work.
*not its actual name
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