Case Study – Make Hay While The Sun Shines

Money for nothing, or so it seemed.

In 2010 the government introduced their new Feed-in Tariff scheme which would pay an amount of money to any household or business who produced energy through a renewable energy technology.

David was a roofer of 30 years, and his son Paul, an electrician, and they had both noticed a surge in residential properties installing their own roof top solar panels. It doesn’t take long to work out what came next.

Paul and his Dad did their homework, got the necessary skills and knowledge and soon became a father and son solar panel installation team, forming their new Ltd company soon after. The phone started ringing, and didn’t stop.

There were any number of companies selling roof solar panels to residential property owners and the feed-in tariff made it an easy sell. Free electricity and cash back. Paul and his Dad were flat out with installations.

By 2013, Paul and David had 2 vans and were having to sub-contract work on a regular basis, sometimes to as many as 10 people. Things were good.

The fuse, however, was lit back in 2014 when the government started to gradually reduce the Feed-in Tariff payments with further plans to reduce them in early 2016. In short, the demand for residential solar fell and did so rapidly.

Over the next 12 months, the main flow of business had come from one large re-seller based in Manchester. Although there were no real warning signs, Paul and David had noticed how they were taking longer to pay invoices.

Then came the dreaded news that the large Manchester based firm had gone into liquidation. In one phone call dealt a hammer blow that both Paul and his Dad knew that they could not recover from.

Without payment of the 6 large outstanding invoices, the company was insolvent. The money owed to suppliers and subcontractors fell well short of what was in the bank and there was simply not enough time to look for new business in a tricky market.

This sort of thing was new to them and they didn’t know what to do. Luckily for Paul and David, they found Forbes Burton and contacted us for help.

We quickly made an assessment of the company and presented options to both directors in a way that they could understand what was happening.

Because the company had no funds available to liquidate, we were able to discuss the dissolution route for closure. Dissolution, or Strike-Off, is just as effective as liquidation at addressing company liability and ensuring that the director’s responsibilities are met, but far less expensive and intrusive.

Once instructed, we took care of everything and both Paul and David were able to focus on what their next move would be.

They are both now re-employed and well on the road to getting over their experience.