Background to this Creditors Voluntary Liquidation
Our first aim is always to see if we can rescue a financially struggling company, using a restructuring procedure such as Administration or a Company Voluntary Arrangement. However, in some cases, the circumstances are such that these procedures are not viable and a CVL is inevitable.
Doug Sherry (Heathrow) Limited was founded in 1997, and operated as a café concession at Heathrow Airport, providing refreshments for Black Can Taxi Drivers based at Heathrow’s Taxi Feeder Park. Ewa Lawrence became the owner in 2008.
- The Company traded profitably for many years until the Covid-19 pandemic struck in early 2020. In 2020, turnover fell by 53% and by a further 38% in 2022 leading to significant losses, which could not be sustained. Even when the café was able to reopen, customer numbers did not pick up significantly, as fewer Black Cab drivers returned to work at the airport, whilst restrictions on international travel and tourism remained subject to constant review and change. Further problems were encountered when the price of gas and electricity began to rise alarmingly.
- After almost 25 years trading, for the first time the Company’s retail concession contract was not extended and the airport confirmed that the Company would be required to enter into a closed competitive tender process for a new contract. Sadly, the Company’s proposal was not successful with the result that the Company would no longer be able to trade after the expiry of the existing contract on 3rd April 2022.
- Despite trying all they could to trade through the problems, having to make redundancies and put other employees on furlough, the Company could no longer trade on and recover the financial position and consequently could not avoid an insolvent liquidation. Our Brentwood team were instructed by Ewa to prepare a Statement of Affairs, convene a meeting of the Company’s members and then seek a decision from the creditors on the appointment of a Liquidator.
Ultimately, the Liquidation was inevitable due to:
- The enforced disruption of the Company’s business caused by the Pandemic
- The unprecedented volatility in global energy markets
- The loss of the retail concession agreement to operate from Heathrow Airport.
A challenging time, but the client was very pleased with our work
During a customer care call after the Liquidation was complete, Ewa Lawrence said:
“The service from the Antony Batty Brentwood office was 100% perfect, and I would recommend Steve Marshall and the team to any business that finds itself in the position that we did.
There was an awful lot to take in and understand, and they went above and beyond in helping me, especially around technology, which I find challenging. They sorted everything for me, including dealing with the incoming operator to facilitate an orderly transfer of staff to them under TUPE to safeguard their jobs and dealing with the complex contractual issues with the airport to preserve a value in the Company’s physical assets.
I can now look to the future and concentrate on moving ahead with my life. I would not change anything they did. They could not have done anything better.”
Steve Marshall, head of our Brentwood office said:
“After 25 years of successful trading, it was a sad and stressful time for Ewa and her staff. We are grateful for her kind comments and glad that we were able ensure that the staff retained their jobs and guide Ewa through what must have been a very difficult time.”
A CVL is a solution to Creditor Pressure
If the company cannot be saved by using a restructuring/turnaround insolvency process, such as a Company Voluntary Arrangement or a Company Administration, then it is highly likely that a Creditors Voluntary Liquidation (CVL) will be needed. A CVL can only be carried out by an Insolvency Practitioner, and we will only recommend a CVL if there are no other options.
Some of the key benefits of a Creditors Voluntary Liquidation, in general, are:
- Once one of our qualified Insolvency Practitioners has been appointed as Liquidator, the company’s creditors will need to communicate with us and not with you as a director.
- Where/if required we help Employees claim unpaid wages, including holiday pay, redundancy pay and loss of notice pay. No redundancies were made in this case.
- Prevents further losses being incurred.
