Closure support:
Delivering a controlled wind
down to maximise value
There are a number of reasons
why businesses and organisations
are closed down:
•
a strategic decision to focus on different markets or products and services
•changes in international legislation/regulation or tax regimes dictates closure
•a change in technology dictates a withdrawal from a market
•
there is a loss in market share or franchising/licensing agreements
•
the business is under performing/cashflow problems and cannot be turned
around or sold
•
a government grant/contract is due to expire or funding is withdrawn.
Why close?
The final days of an organisation
• I don’t have the time to deal with
this project
• My team don’t have the
experience or expertise to identify
and deal with the regulatory and
legal requirements
• I do have resources to deal with
the detail but need project
management support
• I am unclear as to process,
timescales and how issues are
or may be inter related
Issues How we can help Operational • Free up management time and leverage internal resource as required • Advise on efficiencies to minimise costs relating to the exit process • Provide practical support in dealing with suppliers, customers and personnelCommercial • Advise on and ensure that both commercial and legal dormancy are achieved
• Highlight pitfalls of business exit to ensure that directors’/shareholders’ liability is minimised
Assets • Assist in identifying realisation and exit strategies for property assets • Effective disposals of other assets in a tax efficient manner Liabilities • Ensure the liability position is managed effectively with third parties • Identify contingent liabilities and assist in resolution strategies prior to formal elimination of the entity
Tax • Provide specialist tax advice throughout the process to ensure that closure and elimination is undertaken tax efficiently
• This includes effective corporation tax planning and dealing with SDLT and VAT issues
• Support with dealing with employment tax issues including PAYE/NIC, redundancy and severance payments as well as compromise agreements
Project management • Provide a tailor made approach from piecemeal advice to full project management
• Create a bespoke project plan to ensure the critical path and correct sequence of events is followed
Communication • Provide project tools to monitor and track progress, providing visibility on key issues and milestones for project teams and senior management
• Also support in communication strategies and stakeholder management
Elimination • Advise on and effect the most appropriate method of elimination to ensure the desired outcome is achieved • Ensure that all UK statutory obligations are complied with
(including overseas compliance, where applicable)
Why seek support?
How we can help
• I am comfortable with the process
overall but need specialist support
for the liquidation/strike off
• I need to provide senior
management with an objective
view as to progress and risk
management
TRADING DESIGN/PLAN/STRATEGY OPERATIONAL WIND DOWN/LEGAL WIND DOWNIMPLEMENT/REVIEW LIQUIDATION/STRIKE OFFELIMINATION
TRIGGER TO EXIT CESSATION OF TRADE COMMENCEMENT OF ELIMINATION (LIQUIDATION OR STRIKE OFF) DISSOLUTION PLANNING IMPLEMENTATION GOVERNANCE, REPORTING, COMMUNICATION
Issues How we can help Operational • Free up management time and leverage internal resource as required • Advise on efficiencies to minimise costs relating to the exit process • Provide practical support in dealing with suppliers, customers and personnel
Commercial • Advise on and ensure that both commercial and legal dormancy are achieved
• Highlight pitfalls of business exit to ensure that directors’/shareholders’ liability is minimised
Assets • Assist in identifying realisation and exit strategies for property assets • Effective disposals of other assets in a tax efficient manner Liabilities • Ensure the liability position is managed effectively with third parties • Identify contingent liabilities and assist in resolution strategies prior to formal elimination of the entity
Tax • Provide specialist tax advice throughout the process to ensure that closure and elimination is undertaken tax efficiently
• This includes effective corporation tax planning and dealing with SDLT and VAT issues
• Support with dealing with employment tax issues including PAYE/NIC, redundancy and severance payments as well as compromise agreements
Project management • Provide a tailor made approach from piecemeal advice to full project management
• Create a bespoke project plan to ensure the critical path and correct sequence of events is followed
Communication • Provide project tools to monitor and track progress, providing visibility on key issues and milestones for project teams and senior management
• Also support in communication strategies and stakeholder management
Elimination • Advise on and effect the most appropriate method of elimination to ensure the desired outcome is achieved • Ensure that all UK statutory obligations are complied with
(including overseas compliance, where applicable)
How we can help
Case studies
Global camera manufacturer
This global manufacturer and distributor of ‘traditional’ photo image cameras made a strategic decision, based on technological changes, to cease manufacturing and withdraw from ‘traditional’ photo imaging/camera manufacturing and distribution worldwide.
Key issues and challenges
With continuing trading worldwide in newer and developing markets, both business and consumer, preservation of the Group’s brand and reputation was vital. Purchasers of cameras were provided for by worldwide warranty support provided by a competitor in the market.
The UK had a its own distribution company with large premises close to Heathrow airport and this entire operation had to be closed down, ensuring that all employees, suppliers and service providers were dealt with sympathetically whilst minimising cost. The company had leasehold premises and was party to two pension schemes and financial settlement of the company’s obligations in relation to these had to be negotiated.
The wind down period was lengthy and projected to extend beyond the date set by the Japanese parent for all photo imaging staff to be made redundant. The Group required a partner and adviser to assume responsibility for the management of the wind down of the UK company’s affairs beyond this date until the company could be placed in member’s voluntary liquidation. The Japanese directors of the company remained in office.
What was achieved
We were engaged to work alongside management to understand the nature and extent of all outstanding issues and assume responsibility for managing these to a satisfactory conclusion after all staff were made redundant, including realising remaining debts and
agreeing and settling liabilities. We project managed all external advisers until all outstanding matters were satisfactorily resolved, thereby enabling a members’ voluntary liquidation to be proceed in due course. We produced regular monthly management reports and completed quarterly Group consolidation packs until the company was eventually placed in member’s voluntary liquidation. We held regular progress meetings with members of the Group’s European management charged with overseeing the closure of the company on behalf of the Parent company in Japan.
Food manufacturer
Closure of non-core operations of a £200 million turnover white label food producer.
This supplier of bakery goods to large supermarkets had conducted a strategic review and was closing a number of non-core operations which operated as standalone businesses.
We worked with management to plan the wind down of manufacturing and liaised with customers and suppliers to reduce the impact of closure on their businesses by clear communication and practical assistance in sourcing alternative suppliers for customers. We also incentivised customers to honour their existing contracts by using targeted discounts. We also ensured that key staff had sufficient retention inducements to maintain continuity of production and supply during the wind down activity.
What was achieved
The business maximised the operating revenues and profit from the businesses which were closed. In addition the goodwill of customers and suppliers, many of whom also supplied other group companies, was maintained. By ensuring that key staff had adequate retention payments in place, the operations of the business were not adversely affected by the closure.
Contact us
•
One dedicated team from start to finish
•Experienced specialists
•
Partner-led
•
Access to additional specialist services eg pensions, legal, HR
•Grant Thornton International member network
•
Pragmatic and solutions based approach
•
Strength and depth evidenced by our track record
Why Grant Thornton?
Sean Croston
Partner and Head of the Corporate Simplification Group T 020 7728 3172 E [email protected] London Sean Cannon T 020 7865 2565 E [email protected] Thames Valley Bruce Maidment T 01865 799900 E [email protected] North East Julian Berry T 0113 200 1604 E [email protected] North West Neil Kilborn T 0151 224 7241 E [email protected] Midlands Fiona Waddy T 0121 232 5241 E [email protected] South Cara Cox T 023 8038 1137 E [email protected] South West Sharon Bradley T 029 2034 7505 E [email protected] Scotland Linda Crookston T 0141 223 0669 E [email protected]
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