The background

Earlier this year Paul Lever, the director of Ultracoms Limited, came to Clarke Bell for insolvency advice because of the financial difficulties his business was facing.

Ultracoms was based in Manchester and provided telecommunication services across Northern England. Paul had invested his own personal funds into the company, as well as taking out a Director’s Loan and an overdraft facility with his bank. The company performed well over the first few years, with new contracts being secured and turnover increasing steadily.

However, things then began to change. The level of competition within the sector intensified dramatically and Ultracoms found that its competitors were offering similar services but at a much lower rate. The company was not able to match these rates and still remain profitable.

Later that year, due to personal circumstances, the director became unable to work on a full-time basis and had to take a step back from the company for long periods of time.

When he did return to work full-time, he saw that the company had lost a considerable amount of business. He continued trading though, as he believed that business would pick up again and that they would be able to return to their previous levels of turnover and profitability.

However, it soon became clear that, due to the economic climate, this was not going to happen. The director realised the company could not survive in its current position, and there were no further funds to invest into the business. So, he decided to seek professional advice.

The solution

His Accountant recommended that he contacted Clarke Bell for insolvency advice.

The financial position of the company was discussed and it was resolved that the company could not continue its business due to all of its liabilities. It was agreed that the company should be placed into Creditors’ Voluntary Liquidation (CVL), with John Bell appointed as the liquidator.

John said:

“The current economic climate is causing problems for a lot of businesses. A CVL is often the best course of action for a company. This now allows Paul to put all these issues behind him and to focus on the future.”

Ultracoms’ director, Paul Lever, said:

“Thank you for all your help with the liquidation matters. You were a joy to deal with.”