supporting your business - poppleton and appleby · situations and can help to bridge strained...

SUPPORTING YOUR BUSINESS

Our services

Who are we?Poppleton & Appleby is one of the most respected independent business recovery and insolvency practices in the Midlands.

From offices in Birmingham, Coventry and Wolverhampton, we provide a partner-led service, working with independent accountancy and legal practices, lenders and their clients across the region.

What do we do?We offer specialist advice to businesses in financial difficulties, and much more. We understand the stresses involved in these situations and can help to bridge strained relationships with lenders, landlords, key suppliers and HM Revenue & Customs (HMRC).

By doing so, we can often create a breathing space in which to put together a successful recovery strategy, so that a business can be preserved through restructuring and refinancing.

Sometimes insolvency is the correct way forward, but with careful planning and transparency, a new business can often be set up, and go on to prosper, without the burden of the old company’s debts.

Why use us?We aim to provide clear, practical, professional advice that also demonstrates a high degree of commercial awareness and industry knowledge.

We know that any introduction to us needs to reflect well on the introducer. We hope this explains why we are the preferred choice for many professional advisers in the region.

We don’t do accountancy, audit or tax work, so our work introducers can also have complete confidence that there will be no conflict with any services they offer.

The nature of what we do makes us acutely sensitive to fees, particularly where they may impact on directors’ personal guarantees.

However, it is important to us to develop strong, long-term relationships with our work introducers so they feel able to talk to us, regardless of how complicated or time-critical the problem may be. We often advise in circumstances where recovery of our time costs may be limited, or even non-existent.

What makes us different?All of our partners have “Big Four” experience and began their careers as accountants and general business advisers before becoming insolvency experts. We believe that this background gives us a unique insight into what works and what doesn’t.

Through our sister company, Ludgate Finance, we also have direct access to a host of non-insolvency solutions, including access to funding, cash flow management or simply buying time from pressing creditors. This also enables us to fund newcos or restarts through pre-packs, for example.

We are the first choice for many accountancy and legal firms in the region and our credibility and expertise is recognised by many national and independent lenders, who are happy to support our advice to your clients. This helps avoid the conflict that can sometimes arise where relationships with lenders may have broken down.


www.poppletonandappleby.co.uk

Our primary aim is to explore viable alternatives to formal insolvency and, where possible, to preserve and protect a business through refinancing and restructuring. As part of that process, directors need to understand fully the alternative courses of action available.

Insolvency: how can we help?

When financial problems arise, or the prospect of insolvency looms, however remote, it becomes more difficult to make rational judgements.

Directors need to decide whether the company should stop trading and if so, when. Their duties will also change, to include a duty to preserve the status quo for the benefit of creditors and shareholders until the company’s future is determined.

If there is a real risk that creditors will not be paid and directors allow the company to continue, they may leave themselves open to claims of wrongful trading, leading to possible disqualification and/or personal liability.

The courts place great reliance on directors who have consulted with their accountants or solicitors, but even more so when they obtain competent, independent advice from a licensed insolvency practitioner.

That is where we can help.

It is essential that directors are making the right decisions and that these decisions are properly recorded. At Poppleton & Appleby, we can help directors with commonsense measures and advice to create a framework for managing a company in difficulty.

In times of crisis and stress, these steps are often ignored to the directors’ detriment. Our advice can ensure directors avoid criticism at a later stage and can be crucial in keeping control over the decision-making process and avoid lenders, HMRC, landlords or creditors influencing the outcome.

Helping directors to make the right decisions

When insolvency is unavoidable, it is important to be fully informed and prepared for what lies ahead.

Insolvency is not a process to be scared of. We also know that by bringing on board an insolvency practitioner with credibility in the marketplace, and by working in a transparent way, it is possible to achieve a surprising level

of support from existing stakeholders.

And the process can often lead to the legitimate setting up of a new company, without the burden of the old company’s debts. Proper and timely planning is essential, taking into consideration issues including:

• the impact of personal guarantees on the directors

• whether a pre-pack sale of the business may be appropriate

• whether working with Ludgate Finance would enable funds to be made available to acquire the business through a new company

• talking to creditors while a solution is worked out.

Pre-insolvency advice

Much of our work involves small to medium-sized limited companies. Sometimes these companies have cash flow problems so acute that a rescue is not viable in the time available.

Where we do recommend a formal insolvency process, we take time to explain why and the options available to directors. We will give clear, straight forward advice, outlining what we believe is right for the company and other stakeholders affected by the decision.

It is important to retain control of the decision-making process wherever possible, but also to be alert to the position of creditors who may hold security against the company and who need to be involved and agreeable to any suggested insolvency process.

We have strong relationships with both national and regional lenders, who may already be providing credit facilities to the company. We are regularly asked by these lenders to give a second opinion where other insolvency advisers are in place and even to take over an assignment where the lender is not comfortable with the existing adviser.

We have also been called in by directors and their advisers in situations where lender-appointed advisers are not producing timely and constructive solutions to a company’s problems.

In those circumstances, we have produced swift, proactive, comprehensive advice and lenders have been content for us to deliver a solution in place of their own appointed advisers.

Corporate insolvency



The personal insolvency environment, affecting individuals and partnerships, has changed dramatically in recent years, particularly through the growth in non-insolvency practitioner advisers offering debt management plans and other informal insolvency arrangements.

We believe our professional qualifications and expertise are best used to advise individuals and partnerships with more complex financial positions and where the value of assets at stake is more substantial.

This includes directors with personal guarantee issues and partners in professional practices that have fallen into difficulties.

There is a strong tradition of professional and medical sector businesses – such as solicitors, accountants, quantity surveyors, doctors and dentists – trading as sole practitioners, partnerships and limited liability partnerships.

These business structures have very specific requirements if formal insolvency needs to be considered and careful consideration needs to

be given to the impact on the principals of the business, where personal assets are exposed to creditors.

Each of these sectors also has its own profession-specific considerations to deal with, from regulatory and compliance to reputation and the ability to trade on.

Early contact with the Poppleton & Appleby team is the key to unlocking options that may be available to provide a practical, workable solution in what are often difficult and stressful circumstances.

Personal insolvency and the professional sector

At Poppleton & Appleby, we work alongside existing accountants to help return capital to shareholders in a tax-efficient manner.

By becoming involved at the planning stage, we can focus on identifying the maximum cash distribution that can be made at the initial stages and ensure it is restored to shareholders as soon as possible.

Solvent liquidation

When a company has reached the end of its useful life and/or cannot find a buyer – or the owner has simply had enough – a solvent liquidation allows creditors to be paid off, with the balance tax efficiently distributed to shareholders.

With large sums of money often involved, expert advice is important to avoid

problems later. At the planning stage we will assist with:

• tidying up the balance sheet • ensuring Companies House information is

up to date• the timing of distributions• indemnities, where relevant• reviewing contingent liabilities

(e.g. leases, pensions).

The work we undertake will be clearly set out from the start and is always competitively priced.

Group and company reorganisations

Tax problems can arise where companies carry on more than one trade and shareholders decide to sell only certain of these or, at some time during its life, see advantages in dividing

up business assets so that they can go in different directions.

A section 110 scheme allows the demerger of multiple businesses. These schemes are often tax-motivated but the commercial justification for reorganising business assets, trade or shareholders’ interests within a company should not be frustrated by potential tax liabilities alone.

Tax planning is critical and we generally work closely with accountants and tax advisers to obtain appropriate HMRC approval. We also work alongside legal advisers in drafting documentation enabling the reorganisation.

These schemes can be complicated but not overly expensive if properly planned. We clearly price such work at the outset, with updates throughout the process.

Solvent liquidations and section 110 schemes

We are well known as a leading firm of insolvency practitioners, but we advise in many other areas that are an increasingly important part of our services.

More than just insolvency practitioners…

Restructuring and turnaround usually apply to businesses where financial problems are so acute that the risk of failure is very high.

In these circumstances, it is often difficult for owners and management to be objective about their prospects for survival.

By working alongside management – and being able to gain support from lenders, landlords, customers, suppliers and HMRC – we can be fundamental in identifying the causes of a

business’s problems. Our support may include:

• negotiating with creditors, either to put in place time to pay arrangements or to explore opportunities for some form of debt forgiveness

• disposal of underperforming or non-essential business assets

• obtaining new or more appropriate funding to ensure the long-term survival of the business.

Sometimes a formal insolvency is inevitable, particularly where the business has built up debt that it is unlikely to be able to repay

in a timeframe acceptable to creditors.

Our skills and training enable us to help establish and implement a rescue plan to an identified timescale and cost. We work alongside many excellent turnaround professionals and have developed a close working relationship with the Institute For Turnaround.

Where appropriate, we are also able to bring in experienced finance directors, either on a part-time basis or on short-term assignments, which can often help rejuvenate a struggling business.

Restructuring and turnaround

Cash management is crucial for financially stressed businesses, which need to preserve cash to buy time in which to restructure funding more appropriately.

We often work alongside management teams

and their accountants to assist in tightening cash controls and improving reporting.

Our partners are able to move quickly in order to understand the business’s cash needs, concentrating on immediate cash

generation and preservation initiatives.

Our experienced team also understands the needs and expectations of stakeholders, rebuilding relationships and buying additional time to develop and carry through a restructuring plan.

Cash management



When financial problems first surface, directors and senior managers may find themselves in unfamiliar territory.

As their time is diverted to crisis management, attempting to run the business against a backdrop of cash management problems can lead to strained relationships with lenders,

customers, suppliers, landlords and HMRC.

We have a proven track record of delivering hands-on, practical assistance in talking to banks, suppliers and Crown departments to negotiate time to pay arrangements, or even short-term lending facilities, to provide the time needed to implement a recovery programme.

We have a long-standing reputation and integrity for accurate and timely reporting, which means we can achieve credible results where we can see a viable business with short-term cash problems.

We can quickly get to grips with the cash needs of the business and put in place clear priorities to maximise cash generation.

Negotiating payment plans with creditors

Since the credit crunch, many directors and shareholders are choosing to use their own money to finance their businesses.

This may be by personal cash injection, use of pension scheme monies or simply leaving money with the business by way of director or shareholder loans.

Directors, shareholders and their advisers often miss the point that they need to take security in much the same way as a bank would do, through a private debenture – a charge, like

a mortgage, that provides both control and security over the ‘investment’.

In conjunction with leading counsel and solicitors, we have developed a private debenture security document providing directors and shareholders with a charge over the business and assets.

Even where the assets covered by the debenture are limited, its existence allows you a measure of control over other creditors, including HMRC.

The full value of a debenture is often only realised when it comes to insolvency. Through a debenture, directors and shareholders have been able to recover their investment in full, by way of cash and assets, which can then be used to restart a business free from the debts of the old company.

The key to success is timely advice – preferably before the investment is made – to ensure this is done in a safe and secure manner. However, we can advise on the mechanism necessary to secure monies already invested.

Private debentures

Purchasing a business from an administrator can be a complex matter but the skills and knowledge we have built up through our insolvency assignments mean we are well equipped for this specialist work.

We have successfully helped many companies to buy businesses out of insolvency proceedings and can provide expert support to prospective

purchasers and their advisers throughout the process of co-ordinating valuations, dealing with transferring employees and ensuring the sales contract is appropriate. We are also able to attend any relevant meeting.

Buying a business from an insolvency practitioner

... and there’s more!

Where goods belonging to a company have been improperly sold, sometimes unwittingly by an insolvency practitioner, we have been very successful in recovering goods and/or money in lieu.

The reality is that any business is likely to suffer a number of bad debts in a year as customers enter into formal insolvency proceedings.

Including a robust and effective retention of title clause in the trading terms of a business enables it to reclaim goods that have not been

paid for, usually after the customer has entered an insolvency process.

Our services start with a review of your contractual documentation and consideration of the actual goods you supply.

We can advise you on their effectiveness and test the process by applying the criteria for making a successful claim, as a surprising number of apparently robust clauses can be defeated by an insolvency practitioner acting for an insolvent customer.

In one assignment we worked on, the insolvency practitioner had used the goods in ongoing trade and was resisting the claim to retention of title, so as not to have to pay for the goods.

We undertook a detailed analysis of the claim on behalf of the client and were able to defeat many of the points raised by the insolvency practitioner. This resulted in a cash settlement of the claim, after the client’s own attempts to deal directly with the insolvency practitioner had continued over many months with no real progress.

Retention of title


If directors do not act on professional advice, or choose their own course, the consequences can be severe.

• Disqualification as a director for anything between two and 15 years can have a massive impact on a person’s ability to earn, along with all the associated issues.

• Personal liability is also a risk where a director has carried on trading without any prospect of avoiding an insolvent liquidation.

We are able to advise directors who may find themselves facing claims for disqualification and/or personal liability.

The director concerned may hold a number of directorships, with no day-to-day dealings with the company in question. Our partners can compile detailed affidavit evidence to support an application for leave to act as a director and act as expert witnesses in defence of these applications in court.

With the right professional advice, the risk of insolvency-related sanctions can be avoided or minimised.

Insolvency proceedings - sanctions against directors


We have access to sophisticated credit monitoring systems, which report significant information on most UK companies and, in some cases, partnerships and sole traders.

This information enables monitoring of the financial health of clients, customers, suppliers and competitors. We make this service available free of charge to

selected accountant and adviser contacts and can set up email alerts on any company/business in which you may have an interest.

Business information and alerts

Many businesses do not realise the impact that a company’s credit rating can have on their cash flow, or borrowing capabilities, until it’s too late.

Our credit monitoring systems allow us to identify businesses whose credit ratings may be problematic.

Sometimes this can simply be the result of incorrect information being provided on the business and our business experts are able to rectify incorrect credit ratings quickly and easily. In several recent cases, we have been able to triple the score of the businesses concerned.

Credit ratings

We are increasingly asked to advise on deceased estates where solicitors are acting as executors and need to exercise caution where significant creditor claims are to be settled from estate assets.

With assets like investment portfolios and property falling in value and taking longer to sell, plus the impact of inheritance tax, there is a risk that assets may fail to meet creditor claims.

In that case, the estate may have to be dealt with under the Administration of Insolvent Estates of Deceased Persons Order 1986 and

control may pass to a trustee in bankruptcy. This can occur some time after executors have been realising other assets and discharging probate costs.

The trustee will consider all payments made from estate funds, including professional fees, since the date of death, which are automatically and retrospectively void unless ratified by a court.

Courts are inclined only to ratify payments made before the date at which the executor knew, or should have known, the estate was insolvent so executors could be ordered to

repay to the trustee fees and expenses billed after that date and join the queue of creditors.

Poppleton & Appleby has extensive experience in dealing with insolvent estates, including acting as a trustee, and can offer practical, professional support to executors.

We can advise on the legal issues involved and our background as insolvency practitioners means we are familiar with dealing with the commercial aspects of asset realisations and claims settlements, with systems in place to deal with this specialist work.

Insolvent estates

A key advantage of working with Poppleton & Appleby is our close working relationship with sister company Ludgate Finance.

Ludgate Finance is a highly experienced team of finance professionals with a comprehensive network of contacts across all types of business finance. All the directors and senior management are from banking and asset based lending backgrounds, giving this specialist team a clear understanding of stakeholders and their expectations.

The team can advise clients on the best use of funding for their business before sourcing the most competitive providers.

Ludgate Finance is also at the forefront of the latest developments in lending to business and is a main sponsor for the peer-to-peer online lending platform ThinCats (www.thincats.com).

Introducing Ludgate Finance

We often see scenarios where clients have been pushed into financing arrangements that are either wrong, too expensive or incorrectly structured, limiting the ability of the business to expand and grow.

The funding marketplace is very different today and is constantly changing. The internet has also opened up opportunities

for new and unique sources of funds, which now rival traditional forms of lending.

In this complex funding environment, the Ludgate team effectively act as old style bank managers, taking the time to understand the client business, structuring appropriate facilities and providing access to

additional finance through our extensive contact network.

Many accountants and other advisers have taken advantage of our free business finance health check, which often identifies opportunities for businesses to reduce funding costs, improve profitability and enhance cash flow, setting a business free to move forward.

Refinancing



We are often instructed to carry out independent business reviews by directors, investors and lenders.

This may be in response to a particular difficulty or concern or because a business is looking to increase its borrowing facilities.

Often we will be assessing the present financial position of the business and its short to medium-term viability by reference to profit and loss and cash forecasts. The process can help management to review their future strategies and challenge their thinking.

We can identify potential problem areas and how these risks can be minimised or alleviated, preparing a detailed report and discussing our findings with management and lender, as appropriate, with recommendations on how best to move forward.

Independent business reviews

The Ludgate Finance team is often called upon by both mainstream and independent lenders to

carry out pre-lend reviews. We have a reporting structure that is both flexible and cost-effective,

enabling lenders to make informed decisions prior to taking on any new business.

Pre-lend reviews

With its expertise in funding, Ludgate is often asked to work alongside lead corporate finance advisers. Our remit is to source niche market funding to enable transactions to take place.

Sometimes it is possible to source all the funds from one lender. More often, we use our skills to build a mix of facilities against different asset classes, both to fund the acquisition but also to ensure the availability

of sufficient working capital moving forwards.

Ludgate Finance also has access to mezzanine finance providers where the senior debt position has already been fully utilised.

Funding assistance for corporate finance advisers

If you would like more details on Ludgate Finance’s services, please visit www.ludgatefinance.co.uk or contact Louise Gumery on 0121 200 2962 or at [email protected] for a copy of our brochure.

For more information

Martin Coyne

Martin, a qualified Accountant since 1982, has more than 25 years’ experience in refinancing and insolvency, working across a broad spectrum of industry sectors to help businesses survive challenging times and move forward. A Partner at Poppleton & Appleby since 1993, Martin is also Managing Director of sister firm Ludgate Finance.

Our partners

Matt Hardy

Matt spent nine years at KPMG before joining Poppleton & Appleby in 1996, where he qualified as an Insolvency Practitioner in 1998 and was appointed Partner in 2003. He works on personal and corporate insolvency assignments and in advising businesses, his priorities are to understand the dynamics of their sector or specialism and to tailor solutions around these.

Andy Turpin

Andy has more than 25 years’ insolvency and restructuring experience, advising businesses ranging from typical owner-managed operations to Viyella and Sock Shop. He qualified as an Insolvency Practitioner in 1996, following ten years’ experience with two Top Four practices before joining Poppleton & Appleby, where he became a Partner in 2004.

Our team



Garry Baxendale

Garry began his Poppleton & Appleby career in 1976. He has more than 30 years’ experience in handling insolvency and business recovery and has dealt with virtually every type of company during his career.

Our senior managers

Tony Lozano

Tony is a qualified Insolvency Practitioner with more than a decade’s experience in insolvency and business recovery matters. His wide-ranging expertise includes dealing with solvent companies, from PLCs to SMEs, retail insolvencies and personal insolvency solutions. Tony has also assisted in independent business reviews and due diligence for stakeholders as well as assisting in negotiations with creditors in distressed circumstances.

Gavin Bates

Gavin, a qualified Accountant, deals with all aspects of business recovery and insolvency, both corporate and personal. He has more than 20 years’ experience in working with businesses of all types and sizes – from one man bands to multi-million pound operations – and has particular knowledge of the retail, construction and transport industries.

Richard Mason

Richard is a commercial finance industry specialist, who worked for banks and asset based lenders throughout his career before joining Ludgate. His clients benefit from his insight into the working capital needs of SMEs, his comprehensive network of contacts in the business finance world and his expertise in working with all stakeholders to achieve cash flow solutions that deliver continuity.

Our business partners at Ludgate Finance

David Grocott

David brings a wealth of experience to his work in finding the right financial packages to support businesses and help them to succeed, including in corporate finance and branch director roles at Lloyds Banking Group. At Ludgate, he sources all types of business finance in the SME sector, specialising in commercial property transactions and investor peer-to-peer lending.

Steve Grice

Steve joined Ludgate Finance in 2011 from social lender Black Country Reinvestment Society, where he helped the organisation grow six-fold during his time there. Previously he spent many years as a commercial manager at HSBC and also ran his own business in Staffordshire.

Areas of expertise and associations

Poppleton & Appleby was founded in 1885 and was one of the original members of the discussion group which formed the Insolvency Practitioners Association in 1961.

Our partners, directors and senior staff have developed expertise across a wide range of industry sectors, as well as developing associations with a number of leading institutions, which help to shape the markets in which we operate.

Manufacturing EngineeringPrintingHospitality and Leisure Haulage and Transport Distribution and WholesaleConstructionRetailRecruitmentMotor DealershipsSolicitors’ Practices Care Homes Professional Football and Rugby Clubs Working Men’s Clubs Golf Course DevelopmentsHoliday Homes

Sectors Institute of Chartered Accountants in England & Wales (ICAEW)Association of Chartered Certified Accountants (ACCA)National Association of Commercial Finance Brokers (NACFB)Insolvency Practitioners Association (IPA)Institute of Credit Management (ICM)Chartered Institute of Bankers (BBA)Institute for Turnaround (IFT)Chamber of CommerceInstitute of Asian Business (IAB)

Associations



Birmingham Office

35 Ludgate HillBirminghamB3 1EH

T. 0121 200 2962E. [email protected]

Coventry Office

8 Manor RoadCoventryCV1 2LH

T. 02476 99 27 99E. [email protected]

Contact us

You can go direct to our site, just simply scan the code.


Popp

leto

n &

App

leby

Wolverhampton Office

West Midlands HouseGipsy Lane, WillenhallWV13 2HA

T. 01902 482 456E. [email protected]

supporting your business - poppleton and appleby · situations and can help to bridge strained...

Documents