Escaping insolvency by the skin of your teeth
Focussing on things you’re really good at is important; it gives you the edge over your competition but even being a world class expert doesn’t always protect you. Sometimes things just don’t go your way.
A few years back, we had a client whose business was extremely specialised with, quite literally, just a handful of potential customers worldwide but, in reality, there were only one or two clients. Orders, when they came, were both substantial and long term but there had been a hiatus, initially just for a few months, then a year, then longer. No company can survive forever without orders.
Colobus was engaged when the client’s largest creditor was about to petition for them to be wound up; that’s the last stage in a long process.
Because of the nature of its business this company could not enter into any formal insolvency process but it still had substantial debts which were long overdue. We set about negotiating debt forgiveness with the creditors, which we did by negotiating reductions in liability of between 89% and 97% and with an indefinite period to pay the reduced balances.
This saved our client from insolvency and allowed it to maintain its essential regulatory status.
Of course, expertise is valuable and, eventually, a sizeable order did come through, enough to solve the problems. Colobus had allowed this team of experts to bridge the gap.