We were asked to meet the director of a children’s play facility on a Wednesday afternoon. The business had a healthy order book for children’s parties and a regular stream of kids and their parents every day.
Over the previous couple of years the business had not hit its turnover targets; despite managing to pay down bank and finance debt and keep the landlord happy, the business had fallen into arrears with the electricity supplier.
Serious Business Arrears and Warrant of Entry
The director was looking to exit the business and the facility manager had expressed an interest in buying the business which, on a day-to-day cash flow basis was viable.
Then the bad news; the arrears were so serious and had been unresolved for so long that the electricity supplier was seeking a warrant of entry in the magistrates’ court to cut the supply. Oh, and it turned out the date of the hearing was set for the following Friday morning – 36 hours later.
After a Thursday discussion with the manager, the bank and some quick document preparation and furious faxing, an administration order was obtained on the Friday morning, protecting the company, defeating the electricity supplier’s warrant and keeping the business open.
The business was sold to the manager on the same day, preserving the goodwill of the business and maximising the return to creditors. Employees retained their jobs and the deposits paid for the children’s parties will be honoured.