By Tim Corfield


We come across this time and time and time again. Directors or business people not seeking adequate guidance when they are making a major decision with their business, or seeking business debt solutions.

Take selling your company. I met Billy a few weeks ago and he told me he’d sold his company around 9 months before for £250,000 – great!

Unfortunately, the company he sold out to has just entered creditors’ voluntary liquidation, which was bad news for Billy. The consideration was settled by a lump sum payment of £50,000 and the balance was due to be paid in monthly installments of £8,000. The monthly installments were six months in arrears.

The directors of the purchasing company had refused to give personal guarantees.

“Why didn’t you get a debenture?” I asked Billy. “I don’t remember our solicitors talking about one.” Billy replied.

The purchasing company had a good debtor book – in excess of £200,000. A debenture charge registered in favour of Billy at the time of the sale would have secured his debt. There was no other borrowing secured with a debenture and I believe, at the time, the directors would have been prepared to let Billy register a debenture charge.

The liabilities of the company are in excess of £1,000,000. Billy might now receive a dividend of 20% of his unsecured debt of £126,000. That’s a loss of over £100,000 for Billy that really could have been avoided.

I doubt that any due diligence was carried out. Otherwise, the financial weakness of the purchasing company would have been identified.

Perhaps Billy wasn’t clear on his instructions. Perhaps Billy only wanted a simple sales and purchase agreement. Perhaps Billy didn’t listen to the advice.


At Griffin & King I always try to make sure our advice is tailored to the interests of the client and communicated in a way that the client fully understands. If we don’t do this, we’re not doing our job properly, as far as I’m concerned.

If you come across any instance with a client where you think we may be able to help, don’t hesitate to call for an informal chat or meeting.  We’d be pleased to help!

We have assisted many people with business debt solutions – view our testimonials here.

If you would like insolvency advice, or further information on company insolvency please contact Griffin & King Insolvency Practitioners on 01922 722205, and speak to me (Tim) Mark, or Janet.

You can also contact Janet by email on, or by text or calling on 07545 806 531.