Avior Consulting met with the director (husband) who acknowledged the Company’s insolvency but strongly desired to retain the business. His personal resources were limited and it was important the business continue trading. We pursued a restructuring strategy with 2 elements: First, a licence agreement enabled the business to continue trading whilst controlling professional fees. The licence agreement was entered into by the Company, as licensor, and a new entity controlled by the director, as licencee. Second, a sale process was conducted whereby the business’ assets were advertised for sale. The director participated in the process and was the highest bidder.
As the business was sold to a related party, a key consideration was ensuring the transaction would not be viewed as a phoenix, which is illegal. This was managed by advertising the business for sale – evidence that the highest price was achieved.
The director purchased the business’ assets, and transferred the employees across from the Company.