Background

Since 2004, Cosmetics Laboratory (CLL) had traded as an independent cosmetics manufacturer based in Horsham, Sussex. After the company’s sole director passed away, and CLL’s corporate governance was being undertaken informally by the existing management team, FRP was approached by solicitors acting for the Executor of the deceased’s estate to deal with the business aspects. The business, which employed 12 people, was making a loss, running out of cash, and facing several legal actions.

Action

FRP’s Restructuring Advisory team engaged with CLL’s management to undertake a high-level financial review of the business and prepare a report setting out the available options. Following completion of the report, it was recommended that a short, accelerated mergers and acquisitions (AMA) sale process was run to find a buyer for the business. During this process our team advised CLL on the critical payments required to ensure continuity, and supported the sale of the business including instructing agents and solicitors, liaising with interested parties, and assisting the company to manage other key stakeholders such as landlords and creditors seeking to take recovery action.

Outcome

The sale process was unusual, as with no director in place and difficulties appointing a new one, the route to appointing Administrators was via a court application by the Executors in their capacity as a creditor of the estate. Despite the additional challenges, the FRP team delivered a pre-pack AMA sale that ensured the continuity of the business and a solution for the Executors; the secured creditor was paid in full, the landlords signed new leases with a new tenant, and the employees’ jobs were preserved.