Professional Services
Mazars
Full Credential Description
The case study focuses on a manufacturing group facing significant financial distress, with an annual turnover of £10 million and over 100 employees. The company was insolvent on a balance sheet basis, primarily due to two major liabilities: a defined benefit pension scheme with an accounting liability of approximately £5 million and unresolved historic legal claims from a competitor, which had resulted in an unsuccessful international defense.
Upon engaging with we, a thorough review of the company's financial position and forecasts was conducted. Meetings with key stakeholders were held to explore solvent restructuring options. However, as the pressure on the business intensified, it became clear that these options were no longer viable. Consequently, the company opted to market its shares or assets for sale, ultimately receiving only assets-only offers. The administration process was approved by key creditors, leading to a successful sale of the business that preserved the employment of all staff.
Additionally, the group had an investment in South Africa that generated royalties. With the assistance of we' colleagues in South Africa, this investment was placed into liquidation under the local insolvency regime, resulting in a successful recovery of the asset for the benefit of creditors. This strategic approach not only safeguarded jobs but also maximized asset recovery for creditors amidst challenging circumstances.