A Liverpool city bar and restaurant, Alma de Cuba Limited, was bought out of administration by a former director for £325,000 after Her Majesty’s Revenue and Custom (HMRC) lodged a winding up petition. Administrators from Greenfield Recovery Limited were appointed after the company struggled to secure financial investment.
Defending a HMRC Winding Up Petition
It has been reported that the company first experienced financial difficulties in January 2011 when an investment failed to materialise. The company were understood to have made an inter company loan that was to be replaced by additional inward investment. The inter company loan subsequently became doubtful when the associated company entered administration.
We understand the company attempted to secure new capital and funds were introduced by the directors, but ultimately the company could not secure new finance from alternative lenders. Lloyds bank was flexible in allowing staged and delayed payments but this exhausted available cash from trading as well as investment funds and working capital. The failure of this investment resulted in a winding up petition being presented by HMRC for non-payment of debt. In their report, Greenfield Recovery Limited stated:
“…new investment was secured, which cleared the HMRC winding up petition, but this was seen as a breach of the covenants of the business loan, worth £1.27 million at the time, and all bank funding was recalled.”
Company Rescue: Avoiding a Winding Up Petition
One of Alma de Cuba Limited’s former directors, Melville Curry, bought the company out of administrators via a company called Alma de Cuba Management Limited. It has been reported that three parties expressed an interest in acquiring Alma de Cuba Limited, but the only offer was made by Alma de Cuba Management.
This new investment means Alma de Cuba Limited may avoid a winding up petition and continue to trade.