The business was incorporated in 2013 and is a designer, manufacturer and distributor of leisurewear accessories and bags. The business had won a number of awards for its products and brand image; it had also successfully raised a number of equity funding rounds from high-net-worth investors.
Reason for Business Failure:
The business experienced a significant drop in demand for its products as a result of the COVID-19 pandemic and revenues fell. As a direct result of gyms and leisure centres temporarily closing due to the restrictions imposed and a drop in consumer spending, this adversely impacted the business.
Unfortunately, the business was unable to flex its operating cost base accordingly; it also sought support from the Government's furlough scheme but, despite the best efforts of the Directors, was declared insolvent.
Conclusions:
The business was well renowned within its market and had won multiple awards. However, the irrecoverable damage caused by a significant fall in demand for its products meant the business was no longer financially viable.
The Directors sought to find a timely resolution on the company's position in order to preserve the position of creditors and the Purbeck support desk assisted them in this process.
Final Settlements:
Lender agreed at £42,000
£30,000 Total Claim Paid
£15,000 Insured's Contribution
£1,700 Total Paid Out in Fees
Support provided by Purbeck Insurance:
Pre-insolvency business advice.
Personal Guarantee negotiator instructed to help reduce outstanding obligations under the Personal Guruantee.
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