#BusinessAdvice #CVA #FinancialRisk #DebtManagement
Hey everyone, I could really use some advice right now. A company I’ve lent over £0.5m to is holding a CVA vote, and I’m not sure what to do next. Here’s a bit of background and what I’m considering:
– What info should I request from the director?
– What professionals should I consult for guidance?
– What are the realistic implications of the CVA passing for me?
– How can I minimize my risks in this situation?
I’m thinking of suggesting a higher personal guarantee in exchange for a repayment agreement or possibly investing more for equity. Would offering part of my loan for equity increase the chances of the CVA passing?
Any thoughts or advice on how to navigate this tricky situation would be incredibly helpful right now. Thanks in advance! 🤔💼 #helpneeded #financialadvice #businessstrategy
> The director has assured me he takes personal responsibility to make me whole regardless of how this turns out and estimates it would take him 2-3 years to do so.
I would think this might be illegal, BTW.
I’m pretty sure that bankruptcies have rules against favouring one creditor over another, so I don’t see why an IVA would be any different.
Sorry for your situation, by the way.
I can only suggest you speak to some commercial solicitors.
I’ve worked in finance for a while and my man, you are not in a good position. You are legally behind banks in seniority so if this company goes bust you will be chasing a personal guarantee for a 25% recovery. Once they claim bankruptcy that will reduce significantly. Why would you place such a large part of your net worth into unsecured loan
Brother you are about to get fucked, first thing in the morning you need to contact an insolvency practitioner and ask him to recommend an insolvency solicitor.
You are about to learn the hard way what the limited liability part means. It’s possible you could end up with 5p in the £ on your £500k.
Unless the director is a complete moron or hopelessly desperate he isn’t going to extend the personal guarantee. You need to get on the creditors committee to review the CVA proposal. This will be a significant haircut on what you’re owed and you will be unsecured behind preferential, fixed charge, and floating charge creditors +hmrc.
Do not invest more of your money into this. You don’t want equity because it’s worth jack shit.
>a new company that would then continue in the same business,
This sounds like phoenixing and is illegal
Hopefully your involvement in the business has been somewhere around 0 also OP, in case someone tries to accuse you of being a director in disguise
Ouch. You’re going to learn a hard lesson on diversification here. A significant proportion of your wealth invested in 1 business is risky AF!