Responding to an Insolvency
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Dealing with an important customer in difficulty
John was the financial director of a UK subsidiary of an overseas plant equipment manufacturer that was responsible for importing and distributing the equipment through the network of independent dealers. One of the larger dealers was clearly in difficulty. It continued to achieve target such that John's colleagues in sales wanted to be supportive. However, significant arrears in the payments arose to such an extent that it was causing John a major headache in finalising his accounts. There was also a suspicion that the dealer was paying other creditors in preference to John, using him as a banker of last resort. John agreed with the dealer that he would co-operate by allowing us to carry out a brief review, which we duly did in conjunction with his auditors. We helped with the preparation of accounts that showed where the money had gone and projections that identified affordable repayments. We also advised John about suitable security measures. These measures helped John agree suitable treatment for the debt in his own accounts.
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