If your passion is the aerospace sector, the initial investment can be significant. It is also fair to say that if you are dealing with some companies in the aerospace industry they can take up to 90 days to settle your invoices – irrespective of the terms you may have agreed with them at the outset. This was the scenario that I faced when I first met with this company’s directors. They had been trading for just over a year and had run out of money. The sales side of the business was not producing as much forward booked work as they would like but it would still have been profitable work were it not for the costs of loans and overdrafts. The rent had not been paid for over three months and other creditors were screaming for payment. The directors were spending as much time ‘fire fighting’ as they were trying to grow their business.
As luck would have it, the landlord was a local pension fund and the principal trustee was sympathetic to the plight of the directors and referred them to me on the basis that he would consider helping them if I felt the business could become a viable proposition. It quickly became apparent that a Phoenix style rescue would be needed for this business to survive. I worked with the trustee and his accountants to arrange for the transfer of the assets to a new company, set up and funded by the trustee. The accountants then proceeded to liquidate the original company.
My role in this case was initially assessment, and then referral to an appropriately qualified professional insolvency practitioner. I was later installed on a retainer basis in the new company as the trustee’s representative to ensure the situation did not arise again!