Case Study: Ultimate Adventures Ltd - CVL
Liquidation of obstacle race events company
The company organised obstacle races aimed at meeting the growing trend in alternative fitness events. The events were successful however, it became clear that the costs of planning and holding the events were significantly higher than anticipated and were not being covered by the ticket prices paid. In addition, 2017 saw a change in the whole obstacle race market, where numbers dropped off due to the large number of races on the calendar and a shift towards more main stream events.
The increasingly competitive environment had the effect of reducing ticket sales and making it even harder to achieve a break-even position on each race. Significant funds were introduced by the management to try and stablilise the cashflow position. Sadly, it became clear that the market dynamics had changed so much that it was impossible to continue. Bridgewood were contacted to explain the options available to the Company.
The CVL process was agreed as the most suitable in the circumstances and the directors were keen to assist closely with the process due to the large number of individual creditors involved. They had orchestrated a race transfer for many competitors pre appointment, as the one which had been paid for either in full or part, was no longer going to be held due to the CVL. There were some 700 creditors at the date of appointment.
We devised an asset realisation strategy and agreed to cap our fees both pre and post appointment, to enable a dividend to be paid to unsecured creditors. Extensive work was undertaken contacting and determining the creditors which was challenging due to the level and contact details available. Once the process was complete, a dividend was paid of 8.64 pence in the pound with a total of over £15,000 being distributed to over 650 parties.
Due to our competitive and fixed fee structure, we were able to make a distribution to creditors where it was likely that our competitors would not have done so
Bridgewood is a trading style of Bridgewood Financial Management Limited (Company No: 07130329) and Bridgewood Financial Solutions Limited (Company No: 06957765). Registered Office: Poynt South, Upper Parliament Street, Nottingham, NG1 6LF. Registered in England and Wales.
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Paul Mallatratt (Licence No. 2039) and Louise Freestone (Licence No. 2030) are licensed to act as insolvency practitioners in the UK by the Institute of Chartered Accountants in England and Wales and are subject to their Code of Ethics, available in English at www.icaew.com[...]code-of-ethics-d
In carrying out the regulated profession of Insolvency, the firm is subject to the Insolvency Regulations and Guidance Notes at www.icaew.com/insolvency and the Statements of Practice at www.icaew.com[...]insolvency-regulations-and-standards