Interfloor Interior Fitout Limited started trading in July 2008 as commercial flooring contractors and employed three members of staff. Andy Brown was jointly responsible for the day-to-day running of the business.

The company’s first year of trade showed a small loss, however the director was happy with the prospects for the business as new clients were being attracted through customer recommendations.

However, the company then made a substantial loss on a major project due to their client cancelling the contract. While the client did offer a settlement figure for the work Interfloor had completed, the amount offered fell considerably short of the costs incurred by Interfloor. However, due to the situation with their cashflow, they felt they had no option but to accept the offer.

As a result, the director then had to inject further personal funds into the business to assist the cashflow position. The company continued to trade through this difficult period and the director was optimistic that trade would increase again once the economic climate improved.

A further problem occurred on another major contract in which the company was involved. As this project was near completion, the sub-contractors they had employed were not able to fulfil their obligations. As a result, Interfloor had to bring in other operatives to complete the project – at their own expense. In addition to this problem, they were also charged by the client for the disruption that was caused to other traders on the site due to the delays involved.

By the end of the project, the company had made a considerable loss on the contract.

To add to their on-going difficulties, one of the company’s major debtors was placed into Administration leaving them with a further bad debt of nearly £50,000.

This was the final straw for the director. There were no further funds to invest in the company, so he decided to seek professional insolvency advice as to what he should do next.

So, he came to Clarke Bell to discuss his situation. After reviewing the company’s position, the only viable option was to put the firm into Voluntary Liquidation.

John Bell, the senior partner at Clarke Bell, said:

“As the difficult economic climate continues, more and more companies are finding their cashflow situation becoming untenable.

In situations like this, a Creditors’ Voluntary Liquidation (CVL) really is the best option available.”

Andy Brown, the director of Interfloor, said:

“There is only so much bad luck you can take.

Fortunately, Clarke Bell were able to help me to deal with the situation quickly and effectively.”