The recent involvement of BCR in the Administration of a Shropshire farmer’s co-operative has resulted in positive outcomes for two businesses, as well as positive mentions in the local press. We were not only able to secure high value of asset realisations, allowing creditors to receive a dividend, but were also able to ensure the continuity of part of the business under new ownership, saving several jobs.
Craven Arms-based WFS Border Limited, launched in 1972, is set to enter into liquidation over the coming months. The society operated in agricultural group buying as well as commercial growing, wholesale amenity and wholesale retail divisions and at its height was seeing annual turnovers of approximately £25 million. In 2015, however, rates had fallen to below £9 million.
The society held reserves of £57,719 at the end of 2015, however last year losses were estimated to reach £145,000, leaving it in a negative position.
WFS Border, with help from our team, entered into Administration at the beginning of this year. We assisted the society to close the doors of its group buying, commercial growing and retail divisions in south Shropshire. Its wholesale amenity division, however, was able to be sold out of Administration to Spunhill Farm, a growing specialist based in Ellesmere. This will ensure the continued supply of goods to football clubs, golf, bowls and cricket organisations.
Included in the sale of WFS Border’s wholesale amenity division was the transfer of a number of employee contracts to Spunhill, with another 15 WFS Border staff being made redundant with full severance pay.
Creditors Likely To Receive Payout
Joint Administrator Nick West, one of our corporate recovery specialists, spoke from our Shrewsbury office regarding the Administration of WFS Border, saying that despite the closing of its unprofitable divisions, creditors would likely receive pay-outs due to the largest creditor, the society’s bank already having been paid in full.
Quick Action & Cooperation
Mr West went on to say that our ability to trade the company in Administration was possible due to the quick action of the society’s board, who first held a meeting to review their options, and then contacted us for advice on the best possible way to achieve the most value for its assets. This resulted is a better outcome than a forced sale through Liquidation, which would not have included a going concern sale and the transfer of employees.
The co-operation and understanding of all those involved was another reason for the smooth transition, stated Mr West, crediting WFS Border’s employees, customers and its landlord for enabling the society to wind down with the least amount of disruption. The business was able to close its doors with its reputation intact and obligations met, without any acrimony or legal disputes between WFS Border and its creditors.
Professional Partnership Is key
Waiting or ignoring financial problems often only increases stress on staff, customers and management. As the above scenario illustrates, involving our team as soon as possible after having detected financial problems, as well as the full understanding and co-operation of all involved parties, are the keys to achieving success with your Administration, Liquidation or winding-up process.
If you are concerned about your company’s financial future, please speak to one of our team in confidence by calling 0333 014 3454