It initially operated as a social venue from disused commercial premises. This venue became popular and the organisation then became immersed in cultural projects and plans for the regeneration of the local area.
The organisation was invited to apply for government funding but the process took significantly longer than was expected, and was ultimately unsuccessful. At the same time the organisation also experienced problems with its financial management and VAT registration, although a number of these were outside of its control. The organisation was referred to The Business Debt Advisor by its accountant.
After revising its strategy, the organisation had approached local government to apply for alternative funding which was agreed in principle. It was acknowledged that this would enable the organisation to deliver the intended projects, but would not deal with historic liabilities.
The team at The Business Debt Advisor undertook a detailed review of options available, but after a meeting with the local authority it was resolved that continued trade of the existing CIC was not an option, but, it would be possible for a new entity to receive the funding which had been agreed with the existing CIC in principle.
As a result the CIC was placed into administration and the Administrator immediately entered into a pre-packaged sale of the business to an associated company. The business and assets were sold for an amount commensurate to their market value and the transaction also provided for the transfer of contracts of employment, which mitigated liabilities, and safeguarded jobs.
APPROVED ADMINISTRATION SOLUTION
The business was preserved and pre-packaged sale ensured that better realisations were made, than would have been made in the event the CIC had simply entered into liquidation.
The purchaser was successful in obtaining government funding and has delivered planned projects which will benefit the area. The purchaser has also continued the organisations prior involvement in a scheme which will see approximately 125 acres of former dockland transformed with innovative development which will create many thousands of jobs.
The Business Debt Advisor is very proud to have played a large part in the regeneration of this business.