Buying a company that's about to go Bankrupt...

[Catherine197]

Yes you can wind them up. I "think" there is a minimum they must owe you and I "think" that figure is £750.

It also would be possible for the current owner to approach an IP direct to do the winding uo and take all the pain away of dealing with the Official Receiver. However this will only be possible if they have the money to pay the IP, which will not be cheap and that money has to be in cleared funds.

Edited by Catherine197 on Friday 22 August 22:47

[apguy]

KingRichard said:

amir_j said:

KingRichard said:

Thanks for the opinions guys...

More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?

Thanks

The court appoints a insolvency practitioner- accountants or lawyers iirc (cash cow industry- they make easy money). By law they have to publish an ad saying so and so is banckrupt etc in the paper so have a look fro that/ask the company who was given it.

Oh right, so the company will be called to a court hearing first?

It really does depend on how the company is closed down. It could be by
- members voluntary liquidation,
- creditors voluntary liquidation
- compulsory liquidation
- Administration

Members: Means the company can pay all outstanding creditors, it will announce the fact to creditors by calling a meeting and then after the creditors are paid the company is wound-up.

Creditors: This means the company can't pay all of its creditors. Liquidator is either nominated by the company or the Court, creditors notified and any pending/existing creditor action is halted. The liquidator will usually sell the company and assets to provide as much money for Bank/Employees/Tax Man/Creditors (in that order usually). Company wound-up

Compulsory: Creditor gets fed up waiting for money and applies to the court and it issues a winding up order and assigns liquidator. Actions as above.

Administration: Insolvency Practitioner brought in by company. Company placed in Administration whilst Practitioner tries all available routes to save, sell or dispose of company. Normally used to give breathing space to a company being threatened with legal action from creditors.

In all instances notification is normally only given to creditors when a company hits one of the above 4 scenarios and Joe Bloggs gets to know when the winding up order is court submitted and appears in the local rag.

If you want advance knowledge, its actually better to speak to the chap concerned or wait until liquidator or administrator are employed and talk to them. Problem is, the company will likely be a mess by the time that happens.

(All this is by memory so apologies if any points are inaccurate)

Edited by apguy on Friday 22 August 22:55

[KingRichard]

Catherine197 said:

Yes you can wind them up. I "think" there is a minimum they must owe you and I "think" that figure is £750.

It also would be possible for the current owner to approach an IP direct to do the winding uo and take all the pain away of dealing with the Official Receiver. However this will only be possible if they have the money to pay the IP, which will not be cheap and that money has to be in cleared funds.

Edited by Catherine197 on Friday 22 August 22:47

How do you know all this? Have you done something similar?

[KingRichard]

apguy said:

KingRichard said:

amir_j said:

KingRichard said:

Thanks for the opinions guys...

More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?

Thanks

The court appoints a insolvency practitioner- accountants or lawyers iirc (cash cow industry- they make easy money). By law they have to publish an ad saying so and so is banckrupt etc in the paper so have a look fro that/ask the company who was given it.

Oh right, so the company will be called to a court hearing first?

It really does depend on how the company is closed down. It could be by
- members voluntary liquidation,
- creditors voluntary liquidation
- compulsory liquidation
- Administration

Members: Means the company can pay all outstanding creditors, it will announce the fact to creditors by calling a meeting and then after the creditors are paid the company is wound-up.

Creditors: This means the company can't pay all of its creditors. Liquidator is either nominated by the company or the Court, creditors notified and any pending/existing creditor action is halted. The liquidator will usually sell the company and assets to provide as much money for Bank/Employees/Tax Man/Creditors (in that order usually). Company wound-up

Compulsory: Creditor gets fed up waiting for money and applies to the court and it issues a winding up order and assigns liquidator. Actions as above.

Administration: Insolvency Practitioner brought in by company. Company placed in Administration whilst Practitioner tries all available routes to save, sell or dispose of company. Normally used to give breathing space to a company being threatened with legal action from creditors.

In all instances notification is normally only given to creditors when a company hits one of the above 4 scenarios and Joe Bloggs gets to know when the winding up order is court submitted and appears in the local rag.

If you want advance knowledge, its actually better to speak to the chap concerned or wait until liquidator or administrator are employed and talk to them. Problem is, the company will likely be a mess by the time that happens.

(All this is by memory so apologies if any points are inaccurate)

Edited by apguy on Friday 22 August 22:55

It's a bit of a moral thing going on as well...

He's got 40 blokes that rely on him for a living. I wouldn't want to see a firm go to the wall and 40 blokes be put out of work.

I know I can manage his workload better than him and turn a profit. It might involve stripping some drivers away but it's not going to be nearly as bad as getting shot of all of them.

I need to know when to start talking to the bank about asset finance... we're gonna need a stload of cars VERY quickly

How long does it normally take? I mean, could it happen this week or does it take months?

[apguy]

KingRichard said:

It's a bit of a moral thing going on as well...

He's got 40 blokes that rely on him for a living. I wouldn't want to see a firm go to the wall and 40 blokes be put out of work.

I know I can manage his workload better than him and turn a profit. It might involve stripping some drivers away but it's not going to be nearly as bad as getting shot of all of them.

I need to know when to start talking to the bank about asset finance... we're gonna need a stload of cars VERY quickly

How long does it normally take? I mean, could it happen this week or does it take months?

How long's a piece of string If the bloke arrives Tuesday morning and decides the company is trading insolvent, then he could call a voluntary liquidation that day. He could hand the whole thing to the liquidator and apart from a few meetings walk away. In that instance, a fella like yourself approaching the liquidator and "taking over" the firm would be a gift-horse as far as the liquidator is concerned. Of course you wouldn't be taking over the firm as you don't want the existing liabilities so you would be buying the assets and offering new jobs to the displaced drivers.

The problem you have is time. For the taxi industry the business and assets become worthless after a very short period of the existing firm ceasing to trade, so somehow you have to get to know the instant it ceases to trade (or goes into administration) and thats the catch-22 situation.

If it was me, I would be having a frank and open discussion with the current owner.

Edited by apguy on Friday 22 August 23:21

[Catherine197]

KingRichard said:

Catherine197 said:

Yes you can wind them up. I "think" there is a minimum they must owe you and I "think" that figure is £750.

It also would be possible for the current owner to approach an IP direct to do the winding uo and take all the pain away of dealing with the Official Receiver. However this will only be possible if they have the money to pay the IP, which will not be cheap and that money has to be in cleared funds.

Edited by Catherine197 on Friday 22 August 22:47

How do you know all this? Have you done something similar?

No my employer supplies just about every possible type of business you can think of and because of this we see a lot of businesses going under, or we end up putting them under through non payment.

[KingRichard]

apguy said:

KingRichard said:

It's a bit of a moral thing going on as well...

He's got 40 blokes that rely on him for a living. I wouldn't want to see a firm go to the wall and 40 blokes be put out of work.

I know I can manage his workload better than him and turn a profit. It might involve stripping some drivers away but it's not going to be nearly as bad as getting shot of all of them.

I need to know when to start talking to the bank about asset finance... we're gonna need a stload of cars VERY quickly

How long does it normally take? I mean, could it happen this week or does it take months?

How long's a piece of string If the bloke arrives Tuesday morning and decides the company is trading insolvent, then he could call a voluntary liquidation that day. He could hand the whole thing to the liquidator and apart from a few meetings walk away. In that instance, a fella like yourself approaching the liquidator and "taking over" the firm would be a gift-horse as far as the liquidator is concerned. Of course you wouldn't be taking over the firm as you don't want the existing liabilities so you would be buying the assets and offering new jobs to the displaced drivers.

The problem you have is time. For the taxi industry the business and assets become worthless after a very short period of the existing firm ceasing to trade, so somehow you have to get to know the instant it ceases to trade (or goes into administration) and thats the catch-22 situation.

If it was me, I would be having a frank and open discussion with the current owner.

Edited by apguy on Friday 22 August 23:21

Right... I've pencilled in a time for a call on Monday. He's a nice bloke so I reckon I can talk to him.

Cheers.

And thanks to everyone who's replied to this thread