Supply chain insolvencies, fixed-price contract constraints, rising costs, and labour shortages had significantly impacted profitability and cashflow. With mounting liabilities and limited recovery options, profitability and cash flow were significantly impacted. The directors believed they had no choice but to cease trading and liquidate.
Crowe was asked to advise on options for a company deemed insolvent and struggling to manage cashflow and creditor claims, which was impacting project performance and risking further penalties.
We prepared a strategy report for the company’s bankers, who were close to freezing facilities, and secured their cooperation to pursue administration.
This provided creditor protection via a moratorium and allowed completion of certain contracts to maximise realisations and safeguard debtor balances and retentions. Administration also offered better protection for plant, machinery, and stock compared to liquidation.
The bank approved the strategy and agreed to appoint Crowe partners as Administrators at short notice, enabling us to instruct quantity surveyors, specialist valuers, and construction solicitors immediately.
Working with the Board following the appointment of Administrators delivered key successes: Inovating profitable projects to maximise realisations and retain some staff, completing contracts to avoid penalties, and negotiating exits to mitigate claims.
They were able to achieve strong recoveries on work in progress, debtor balances, retentions, and physical assets, while organising the disposal of fixed assets efficiently. The strategy enabled full bank repayment, avoided directors’ personal liability, and secured a significant return for creditors. Most employees quickly found new roles, as the company’s reputation was preserved through a swift, professional process with Crowe’s support.