PGI settlement for Director of sales coaching and consultancy provider to SMEs

£725k

Finance provided 

£155k

Shareholders' Funds

£145k

Personal Guarantee Amount 80% Insurer Contribution; max claim £80,000

Type of Loan
Secured loan
Fixed and floating charge

Sector
Professional Services

Location
Greater London

The business was incorporated in 1989 and provides professional consultancy services to SMEs, blue chip and multi national companies through sales enhancement and training courses.

Reason for Business Failure:

The business was acquired by the incoming management team in 2021 and due to competitive pressures, the business lost a significant level of previously contracted revenues.

In addition to this, the part of the deferred consideration was unable to be met from the businesses available cash resources and as a result entered Administration. In order to preserve jobs and the pipeline of existing work the business was sold as part of a pre-packaged sale process.

Conclusions:

The incoming management team undertook a significant level of due diligence on the business before acquiring taking control in 2021. As part of the acquisition strategy, which required leveraged finance, significant cost savings were achieved but the loss in revenue during 2022 had detrimental impact on the cash flow generated by the business.

The Directors had the foresight to consider Personal Guarantee Insurance as part of their acquisition approach.

Final Settlements:

Lender agreed at £50,000

£40,000 Total Claim Paid

£10,000 Insured's Contribution

£1,600 Total Paid Out in Fees

Support provided by Purbeck Insurance:

• Pre-insolvency business advice.

• Introduced for possible refinance of existing facilities and repayment holidays.
• Introduced the client to a Panel Member firm for early intervention and to limit escalation of costs.

• Personal Guarantee negotiator instructed to help reduce outstanding obligations under the Personal Guarantee

Find out more

www.purbeckinsurance.co.uk

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