Case Study 4 – Meat & Poultry Company

This scenario consisted of a forty-year old Doncaster based family business selling meat products to supermarkets - including a husband and wife, along with their son and daughter. They were operating in a competitive sector and started to lose contracts as the ‘bigger’ suppliers were able to supply meat in volume buying market share to the detriment of the family business.

The company cash flow was diminishing fast and soon became almost impossible to manage. They had stopped paying themselves and could barely cover their costs. The son decided to Google 'liquidation' to help him understand the process to close their business. He contacted a national company who were able to advise him on all aspects of the liquidation process and it was clear the company needed to close immediately as it was insolvent. Although it wasn’t the answer he was looking for, debts were increasing monthly with no likelihood of arresting the decline.

The insolvency practitioner recommended they contact Redundancy Claim to see if they had a valid claim to redundancy. The wife contacted us a few days later. All redundancy claims are based on longevity of service, age and weekly pay. The husband and wife were both over the age of 60 and had worked for the company from the very beginning whilst the children were over forty years old and also in a strong position.

The total claim for the two children was £32,000 and for both parents over £40,000. The stress of keeping the business open and continuing to try to service the supermarkets meant the decision to close the business - albeit difficult at the time - made perfect sense with a considerable amount of redundancy to claim.

The family kept accurate and up to date employment records for all four of them. There were questions around the employment contracts which needed to be addressed. The parents had not updated their contracts for over twenty years. They worked with Redundancy Claim pre-liquidation to amend their employment contacts to bring them up to date.

The liquidation process - despite initial fears - was fairly smooth and the liquidator was organised along with the family. From the date the liquidation was agreed, it took six weeks for the redundancy payments to be paid.

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If your company is struggling financially and you’re worried about your own future, it’s reassuring to know that as a director you may be able to claim redundancy pay should the company be forced into liquidation. Although not always a straightforward...
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