Financial problems became too much for a Manchester firm of hauliers, so Insolvency Practitioners Clarke Bell were called for help.
J Doyle & Son Limited traded as hauliers and employed 20 staff from its Manchester headquarters. Paul Doyle was the company director and he was responsible for the day-to-day running of the business.
The company's first major customer was based in Preston and the contract required five vehicles to service. Thanks to the high level of service they provided, J Doyle & Son was rewarded with a further contract with the Liverpool branch of the same customer, and a further 16 vehicles were needed.
Although happy with the company's rapid expansion, the director was concerned that they only had one customer upon which the profitability of the company relied. To help address this, they managed to secure a new contract with a smaller customer which required a further investment in vehicles. At the same time more work was secured with the company's main customer, requiring yet more vehicles. The director was very happy with the progression of the company.
However, due to the ever-increasing petrol prices, profit margins began to reduce dramatically. To keep the margins profitable the director had to increase their prices. However, the consequence of this was that they lost all the contracts with its main customer - and they were given just two weeks' notice of the termination.
This left J Doyle & Son with an immediate cashflow problem. Although they had secured a number of contracts with a smaller customer, these were not generating enough turnover to cover the company's overheads.
The director had invested his surplus funds into the business throughout the trading period to help with the rapid expansion, and he now had no further funds available.
The company was struggling to pay a number of its creditors, particularly the crown departments. With the crown debt increasing substantially, the director tried to arrange a suitable payment plan to repay the debt owing to the crown departments.
However, before any repayment plan was formally agreed, the director was advised by his Accountant to seek professional advice in respect of the future of the company.
Clarke Bell was approached and, after a thorough analysis, it was agreed that the company was insolvent and should be wound up.
Paul Doyle said:
"We provided the best possible service we could for this client, but it clearly wasn't enough. Once they terminated the contract, there was nothing we could do."
Clarke Bell's senior partner, John Bell, added:
"The impact of the loss of a major customer can be devastating for a business - and it is not an uncommon occurrence. I'm glad we were able to help Paul deal with it."....
