Car Company Keeps Rolling
Cranfield Business Recovery was instructed to assist a business that operated a fleet of 236 motor vehicles which it hired out on both a long and short term basis. Its major customer was the United States Air Force (USAF). The company had significant debts and owed 30 finance companies some £1 million in respect of finance agreements on its motor vehicles fleet.
Following our advice the company entered into administration and continued to trade for a short period whilst discussions were held with all the finance companies and other stakeholders, including USAF. The result was the formation of a new company, by the directors, which acquired the business and assets of the old company. The new company also took over the majority of the finance agreements which resulted in the finance companies avoiding significant losses through negative equity, the director being called upon under personal guarantees of some £600,000 and a reduction in the liabilities of the old company.
As a result of the removal of the finance companies’ liabilities from the old company, creditors can now expect to receive a dividend later this year.
