This matter involves a leasehold restaurant where the client, acting for his father, invested £250,000 into a refurbishment. A subcontractor initiated a “smash and grab” adjudication, which the client lost due to a missed pay less notice.
Unable to pay the £16,000 award, the debt escalated to £22,000 with legal costs. Coastal obtained an interim charging order over the leasehold, with a hearing set early 2025 to determine if it should be made final.
The client began a CVA in late 2024 through another company, but progress stalled. No draft proposal was produced, and communication was poor. The client is unsure if the CVA can bind the other side or justify an adjournment.
The business remains unprofitable post-COVID and carries VAT and bounce-back loan liabilities. Several settlement offers were made but rejected.
The final charging order is likely to be granted. Contesting it without a defence risk further costs. The CVA appears ineffective and may not protect against secured creditors. The client’s £64,000 investment remains unsecured.
Counsel advised conceding the order and launching a valuation adjudication to establish the true liability. If successful, the judgment could be set aside.
The client should register a fixed and floating debenture to secure his investment and cancel instructions to the current IPs. Engagement with the other sides solicitors and escrow arrangements were recommended.
Counsel emphasized the situation is recoverable with strategic action and offered further support subject to fee discussions.
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