Rapid Viability Review Prevents Insolvency
Overview
A Midlands-based learning disability provider faced acute financial distress, with an impending winding-up petition due to unpaid PAYE and a court hearing scheduled the following week. An insolvency practitioner (IP) and lender required urgent clarity on the viability of the business, and we were instructed to deliver a rapid review.
Our Approach
Instruction received Tuesday, site visit conducted Wednesday.
Full viability report completed and issued by Thursday to the IP, lender, and operator.
Assessment covered trading performance, fee collection, staffing levels, and operational model, benchmarked against comparable services.
Key Findings
Unpaid Fees: Two local authorities disputed responsibility for funding high-needs placements, resulting in c.£400,000 in outstanding fees.
Operational Weakness: Evidence of overstaffing and a passive approach to income collection, leading to underperformance.
Immediate Risk: Non-payment of PAYE had triggered a winding-up process, creating urgent insolvency pressure.
Recommendations
Immediate staffing review to align with sustainable operating levels.
Instruction of specialist sector lawyers to resolve funding disputes and recover outstanding fees.
Strengthening of financial controls and active income management.
Outcome
The report enabled informed decision-making within days.
A business angel provided emergency funding over the weekend, allowing the PAYE liability to be settled and preventing the winding-up action.
Legal intervention secured payment from local authorities.
The business stabilised, repaid the business angel, and settled creditor balances.
Key Takeaway
Fast, focused intervention supported by sector expertise can prevent insolvency, unlock cash flow and restore operational stability within critical timeframes.