Administration
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Exploring the prospects of refinancing the business (1)
Peter and his colleagues operated an internet service provider that ventured into a significant web-based development projection relating to software that was thought to revolutionise the way in which pharmaceutical testing would be conducted. Funding for this project was arranged with a private equity house. Unfortunately, some way through the project, this funder had difficulty in raising money itself and was unable to maintain payments to Peter's company, which as a result fell into arrears with its liabilities. This includes HM Customs, which ultimately issued a petition. We secured an administration petition with a view to helping Peter exploring alternative sources of finance whilst at the Petere time continue the internet service provider business as a going concern. Sadly it did not prove possible to raise the required finance for the software development team. We were however able to negotiate with creditors including the Revenue that the internet service provider business be sold to a new company controlled by Peter and colleagues, who made the highest offer. The protection afforded by administration allowed the customer contracts to be assigned in an orderly manner, thereby avoiding the usual discounts upon insolvency.
"Administration is highly effective in stopping creditors in their tracks so you have the time to assess the current financial state and options.
If it is not possible to save the company, administrations can still effectively allow you to sell the business as a going concern, saving livelihoods and reputations.
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