Finance provided
Shareholders' Funds
Personal Guarantee Amount 60% Insurer Contribution; max claim £46,200
Sector
Professional Services
Location
Greater London
The business was incorporated in 2008 and was involved in providing marketing and public relations activities to SMes.
Reason for Business Failure:
The business experienced a decline in revenue from the loss of customers, which it was unable to replace under its own marketing initiatives. The business was also unable to flex its cost base to reduce the cash flow obligations of the business.
An accelerated sale process was instigated by the Director and the insolvency practitioner but no suitable buyers were identified within the required timeframes. A Creditors Voluntary Liquidation was deemed the appropriate course of action to achieve the best outcome for creditors of the business.
The Purbeck Insurance Support Desk were at hand to help the Directors through this difficult period and assisted in securing a reduced settlement with the two finance providers in respect of the Personal Guarantee obligations.
Conclusions:
This case study demonstrates how things can quickly go wrong, not only for start-ups but for all businesses across different lifecycle stages.
Fortunately, the Directors had opted to insure their personal positions by way of Personal Guarantee Insurance and meant they were able to utilise Purbeck's Support Desk and protect their personal estate by reducing the overall indebtedness.
Final Settlements:
Lender agreed at £166,000
£100,000 Total Claim Paid
£66,000 Insured's Contribution
£6,295 Total Paid Out in Fees
Support provided by Purbeck Insurance:
-
Pre-insolvency business advice.
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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.
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Personal Guarantee negotiator instructed to help reduce outstanding obligations under the Personal Guarantee
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