Case Study - The Insolvent Candlestick Maker
The candlestick maker is involved as a sole trader in a medium sized business. He has twenty employees and an overhang of debt.
As well as making candlesticks this sole trader also makes other products related to electrics and lighting.
The owner has found that he cannot compete with major manufacturers in the provision of electrical and lighting equipment but he does have a core market in making candlesticks. That candlestick segment is a niche business which can be reliably forecast to provide profitable turnover utilising only four staff. The candlestick operation uses little in the way of equipment. Candlesticks are made by craftsmen using moulds.
The candlestick maker is fearful that he may lose his home but he discovered that, in his particular circumstances, that was not a real danger once he read the personal difficulties pages of this website.
Once he knew that his home could be protected, the candlestick maker turned his attentions to what could be done to salvage that part of his business which was worth salvaging. By proposing an IVA he was able to keep the niche part of his business running and effectively obtained free credit from his existing creditors as he had agreed to pay them over a four year period under the terms of the IVA.
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