Help and Advice from Poppleton & Appleby, Insolvency Practitioners in Birmingham

Do you REALLY know what your fellow director is doing? A Cautionary Tale

As insolvency practitioners, focused on businesses in Birmingham and the Greater West Midlands, we specialise in giving insolvency and business recovery advice to small and medium sized limited companies in the region which are facing financial difficulties. Being insolvency practitioners isn’t simply about liquidations and winding up, it’s about helping businesses – at least part of them – restructure and recover, saving jobs, so they can trade profitably again.

We come across many businesses that are facing difficulties, often through no fault of their own. Indeed there are plenty of things that can go wrong, many of which could have been avoided in the first place if directors knew what to look for. In this, the first in a series of ‘cautionary tales’ about some of the key things to look out for, this case study looks briefly at a situation where the real issue was that one director did not know what another director was doing, with nasty consequences.

One Director Was Withdrawing Funds Without the Other Director’s Knowledge Resulting in Administration

Recently, we have been asked to advise a Director who is now facing personal financial ruin brought on by the actions of his fellow director.  Their Company has collapsed into Administration after it was found that significant sums had been obtained by his fellow director from a variety of funders and subsequently withdrawn from the business. Our client, who had given personal guarantees, had no knowledge of the extent to which the facilities had been used, and a great deal of damage had already been done by the time we were called in.

We hope to negotiate a settlement with the funders and may well use the Individual Voluntary Arrangement process to protect the Director against any further claims that may come out of the woodwork.

The Sooner Our Insolvency Practitioners are Contacted, the More we Can do to Help.

This is a salutary lesson. Whilst certainly not a common issue, it’s not the first time we have seen this.

Without the right controls and governance in place, it can be all too easy for a company to slide into insolvency without a director being aware of what is really happening. Had we been called in sooner it might have been possible to have avoided the Administration and the IVA.

Our team of experienced insolvency practitioners is ready to listen, advise and take action on your behalf if you or your company is facing a financial difficulty that might lead to insolvency. Contact us or call us on 0121 200 2962 for an initial chat. Alternatively, come and see us at our Birmingham headquarters. The sooner you call us in, the more we can do to help.