It is important that whatever steps you take does not result in the position deteriorating for your creditors. You need to prepare a plan for trading out which starts with up to date accounts and balance sheet and then incorporates forecasts to cover your trading out period. This plan needs to be discussed with the company’s senior people and then embraced.
During the course of the recovery stage, constantly review the process, minute your meetings and compile information as to your actions. In the future if the plan does not work this helps defend your actions.
If it is apparent that you cannot get creditors to agree to withhold action and also that your cash flow falls short of meeting the company’s ongoing liabilities, you need to seek advice from a licensed insolvency practitioner.
There are rescue procedures which will prevent creditor action and also provide debt forgiveness which may relieve the pressure on your company’s cashflow.
The company needs to downsize its workforce but cannot afford the redundancy costs.
It is possible to get assistance from The Department of Trade and Industry (Redundancy Payments Office “RPO”) to contribute towards these costs. The company will have to demonstrate that it lacks the funds to settle these costs and that the assistance will in turn help to save a significant number of jobs. The RPO will require that the monies advanced to your company’s employees are repaid by the company or perhaps even an associated company and the timing of the repayments will depend on the company’s financial position. For more information click here.