Insolvency Case Study – Computer Software Consultancy

Web ProgrammingBackground

Though established 30 years this company had already sold off most of its assets and was run by a single director and with just two staff remaining. The company relied heavily on a £20,000 overdraft facility which was personally guaranteed by the director. Despite the guarantee the bank insisted on a second charge on the directors home. After seeking solicitors advice it would not be possible to accept the banks terms as they were too demanding and gave too much powers for a relatively small amount. Without the overdraft facility there appeared no possibility of continued trading.

HBG were called in to assess the situation. We agreed that the banks terms were totally over the top for such a small overdraft and as most of the business trading had previously been sold there was little chance of being able to establish new business with the current resources and funds. Whilst creditors only totalled some £40k, including the bank overdraft, it was recommended to seek a CVL. The director had recently been putting in personal monies to keep the business afloat and did not have the personal cash flow to repay the overdraft.


  • HBG gathered all the information needed from the company
  • A directors questionaire was completed by the sole director
  • The two employees were entitled to their salary that month up to the date of liquidation, plus holiday pay, redundancy pay, and loss of notice period. This was organised by HBG and the employees kept up to date with their claims
  • A creditors meeting was called to formally put the company into liquidation
  • HBG dealt directly with all creditors

Conclusion. This was a fairly straight forward liquidation for HBG. No one turned up as is often the case at the creditors meeting. The director has since become a sole trader specialising in SEO and is often recommended by ourselves to clients.


The director of the company kindly communicated his satisfaction with how the liquidation was handled. Typical of many directors in this situation he was under a lot of stress and was very concerned about the welfare of his employees. HBG made sure the employees received all their entitlements. As soon as we were appointed we informed the director that creditors only need speak directly with ourselves which was a great lift of burden from the directors shoulders.