partner feature “ Suzi Purnell, of Purnells W


ith the UK having suffered the biggest recession in recent memory, these have been challenging times


for Newport’s business community. According to recent figures from Equifax,


nationally some 600 businesses are still failing every single week. Financial pressures on businesses have


been like never before. But just exactly what happens when a business gets into financial difficulties? Is there hope beyond the bank manager? While we regularly read press stories of


companies going under, there are many more tales that never see the light of day, some with happy endings, others less so. Thus, much of the work that Newport


based corporate recovery specialist Purnells does, goes unseen. Suzi Purnell, who has been with Purnells


for 18 years, took over the Newport practice from her Father in 2009. Purnells is the only dedicated insolvency practice with two licensed insolvency practitioners (Suzi Purnell and Leigh Holmes) permanently based and resident in Newport. Suzi advised: “Businesses do not


tend to broadcast it when they get into trouble. Indeed, many struggle to admit it to themselves even, and often leave it too late before finally visiting an Insolvency Practitioner.” And while Suzi reports that the stigma of


insolvency is lifting due to changes in the law designed to do just that, of the increasing numbers of businesses who get into difficulty in the recession, the vast majority take too long in reacting. “Their solicitors and accountants have often


been advising them that there has been an issue for months,” says Suzi. “But people are always proud of their business and put their heart and sole into keeping it going as long as possible – when an early restructuring would have made their task much easier. “People tend to bury their heads in the sand and come to us late in the day, which is a shame as this can reduce the options available to them.” Suzi says there can be a perception that a


trip to the insolvency expert is a bit like a trip to the dentist – with an irrational fear of the worst. There is a natural temptation to expect a doomsday scenario when insolvency strikes. But more often than not, the reality is less painful than the imagined nightmare scenario. “First off we try to get rid of the fear


factor,” says Suzi. “We sit down with them and complete an ‘enquiry pack’ to obtain all of the relevant financial information. We then discuss all of the possible options with them. Options can range from a number of different formal insolvency procedures, time to pay agreements with creditors, locating an investor and any other option the client could possibly think of. “We run through the pros and cons of each


and every theoretical option. The theoretical options are then dismissed and we home in on the practical options always leaving it for the


Businesses do not tend to broadcast it when they get into trouble. Indeed, many struggle to admit it


to themselves even, and often leave it too late before finally visiting an Insolvency Practitioner


What happens when a business gets itself into financial difficulty?


client to decide as it is very much a personal decision.” By contrast, in dealing with personal


financial difficulties the clients main concern is always their home and there is a general misconception that on petitioning for their bankruptcy or by proposing an Individual Voluntary Arrangement (IVA) they will automatically lose this. Suzi says: “There are legitimate ways


to protect a clients home prior to any bankruptcy. If a Chartered Surveyors valuation of the home is obtained and an up to date mortgage statement is to hand it may be determined that there is, say, £20,000 of equity in the home. If the property is held in the joint names of the client and their spouse, then the clients half share of the equity is £10,000. “By the spouse or another family member


raising that £10,000 and holding it intact for the clients creditors, then it is possible to have the beneficial interest in the property assigned to the spouse or family member. This is so even if the client owes creditors, say, £300,000.” “The client is happy as their home is fully


protected. The creditors are happy as they can be as they recognise that the equity in the property has been realised quickly at minimal cost.


“By contrast it could take several years for


a Trustee in Bankruptcy to realise that equity if a Court Order for possession and sale was required.” To obtain details of the options available


contact Suzi Purnell on 01633 214712 or visit the website at www.purnells.co.uk.


THEbusiness QUARTER 11 “


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