The Situation
Lisa ran a small events supply company in the Midlands, providing marquees and staging to weddings and festivals.
After poor weather disrupted the 2023 summer season and several clients cancelled bookings, the company suffered huge cashflow issues.
She owed £60,000 to suppliers, some of which she had personally guaranteed and £15,000 in unpaid rent on the warehouse.
A county court judgment had been issued against the company and her landlord was threatening bailiff action. Lisa contacted Business Helpline in a panic, unsure how to respond.
The Director’s Concerns
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“Will I be chased personally for supplier debts?”
- “What happens to the warehouse lease if I liquidate?”
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“Can I recover financially if I close the business?”
The Solution: Creditors Voluntary Liquidation (CVL)
We quickly assessed Lisa’s situation and reviewed the personal guarantees. Only two suppliers had enforceable guarantees, while the landlord agreement did not include personal liability.
Our insolvency practitioner advised:
- Entering Creditors Voluntary Liquidation to legally shut down the company
- Communicating with suppliers about the guarantee positions
- Ending the lease through the insolvency process
The Outcome
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The business was closed within three weeks
- Supplier debts were written off, except for two small personal guarantee repayments Lisa managed privately
- Landlord recovered the unit without court enforcement
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Lisa avoided bankruptcy and is now employed in events planning
Key Takeaways
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Personal guarantees don’t always apply to every business debt
- A CVL can help navigate creditor pressure and lease issues
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Early advice makes all the difference in limiting personal risk
”"I thought I’d lose everything. But getting clear advice showed me what was guaranteed and what wasn’t. It saved me from spiralling."
LisaFormer events company director
