Can't afford to liquidate ... what are my options?

WhaLofShi

Hi,

I don't post here but would like some advice if anyone can help.
My business has gone into the toilet. I vacated the premises last week and left behind shelving etc. that the landlord demanded or he'd sue me for breaking the lease. My solicitor advised that this was the best course of action.

I sold what stock I had and will use it to pay off my main supplier, although I owe them more. I also owe a couple of smaller suppliers and a whopper of an electricity bill. The business has no money and my accountant has told me that liquidation will cost between €10,000 and €15,000 that I don't have. I also owe money to the bank and to revenue.

I'd rather not get into amounts on an open forum, so if anyone can help me with some advise I'd appreciate it. Is there a mechanism for closing a company that has debt without the expense of a liquidator?

Thanks

leitrim lad

try to testructure your debts, i have neen in similar positions before , and belive it or not in good times, you dont have to take in a liquidator, you dont have to wind up your company , this could all affect your future credit ratings, so avoid it.
i would advise you from my own doings, to sit down and work out how much capital you have to hand, from the sale of the stock, then in percentages divide it among the creditors, in the mean time while you are working this out, write a letter to each creditor, and explain to them that you have been forced into very tough times and have no other choice but to offer them a percentage of what you owe them , for a setlement, or else the company will enter liquidation and they will end up with nothing,
you then need them to sign a contract with you stating that they accept this payment as for the full amount owed,and they will not follow you for the rest, this will take time and probably alot of haggling and argueing, but atleast you would be offering them something, as many have nothing to offer,
im personally would be more worried about revenue and the bank loan as they can affect your directorships and borrowing power in the future, but dont give them all the fund , divide it among everyone, and be careful with the bank they may try to get a court order against you , if you can get them to sign this agreement tough you are home and dry,no can then touch you.

stepbar

leitrim lad wrote: »

try to testructure your debts, i have neen in similar positions before , and belive it or not in good times, you dont have to take in a liquidator, you dont have to wind up your company , this could all affect your future credit ratings, so avoid it.
i would advise you from my own doings, to sit down and work out how much capital you have to hand, from the sale of the stock, then in percentages divide it among the creditors, in the mean time while you are working this out, write a letter to each creditor, and explain to them that you have been forced into very tough times and have no other choice but to offer them a percentage of what you owe them , for a setlement, or else the company will enter liquidation and they will end up with nothing,
you then need them to sign a contract with you stating that they accept this payment as for the full amount owed,and they will not follow you for the rest, this will take time and probably alot of haggling and argueing, but atleast you would be offering them something, as many have nothing to offer,
im personally would be more worried about revenue and the bank loan as they can affect your directorships and borrowing power in the future, but dont give them all the fund , divide it among everyone, and be careful with the bank they may try to get a court order against you , if you can get them to sign this agreement tough you are home and dry,no can then touch you.

That's all very well and good but it appears that the well is dry. It wasn't a smart move to plough all the money you got from stock sales into paying off one supplier TBH. Lesson for the future - the revenue and the bank are perhaps your most important creditors as ultimatly they will determine wheather you trade again. Everyone else can get in line.

WhaLofShi

The well is almost dry. I haven't used the available cash to pay off my main supplier, but that was my intention. But I'm now reconsidering that. If anyone else has anything i'd appreciate it.

stepbar

WhaLofShi wrote: »

The well is almost dry. I haven't used the available cash to pay off my main supplier, but that was my intention. But I'm now reconsidering that. If anyone else has anything i'd appreciate it.

Sorry I misread. As I said the priority now should be Revenue first, Bank second because before long you'll find yourself with an attachment order is you don't sort out your tax. If Revenue place an attachment order on you this means your bank a/c's are effectively frozen. The bank then has to pay over any available funds to the revenue. And even at that they will remain frozen until you offer a solution / Revenue are happy. Not a nice suitation TBH.

Theo_Paphitis

There may be V.A.T. that you have not claimed back. I.e. HP agreements, etc. Did you give your suppliers personal guarantees? Also you should be aware that preferential treatment towards any supplier is illegal. The director of corporate enforcement can ban you as a director for such an act. If you want to pay a particular supplier i.e. banks, John Smith, etc you are better to them personally rather than through the company.

leitrim lad

or course revenue first and bank second, but keep your cards firmly to your chest, write them all a letter explaining the situation and make them each an offer,
that way the hole lot of them get something,they dont know what available cash you have,so divide it among them all ,doesnt have to be evenly, but dont squander it all on one supplier where there might be a possibility that the supplier could also go down,
sort out revenue and the bank, they will accept settlements, below what is owed in certain situations,but you must get a signed stamped letter of garuntee from them both, stating that this settlement will not affect future dealings
ie your credit rating or future directorships,

viztopia

the most important thing that you should be considering is are you trading wrecklessly? if so this has implications for you and creditors may be able to follow you personally. knowing what you know you shoudl not pay off your main creditor.

leitrim lad

yes thats a very important leave no strings untied,
because if you do and creditors get wind that your not operating withing the guidelines they could have you up in court for fraudulent trading,
that would destroy you for life, if judgement were to be passed,

and dont freeze up, by this i mean not answering calls, letters so on

keep in contact with everyone, (creditors) if you freeze up they will bring you down, as they way they think is this person is out of contact for a reason, time to either claim personal assets or get a court order