We wanted to be sure that we could carry the outstanding debt in our balance sheet, subject to court action, if all other means of negotiation failed. Our own auditors, Walton & Co agreed with the report.
In March of 1997, I recruited a Highways Engineer, Ron Tyson to oversee our manufacturing business in recognition of the numerous highways contracts that he had been involved in and for his valuable experience.
In May of 1997, Ron Tyson introduced me to a stainless metals supplier, Advanced Metals International of Watford. In June of 1995, I met with the owner of the business Ray Kennedy and their accountants the Taylors Partnership and their senior partner Stuart Leaman. Both individuals expressed an interest in my business as a result of the introduction by Ron Tyson, a long term and former customer of theirs. The meeting concluded that we had a mutual common interest being the markets we served and the products we sold. A joint venture was in the making!
In June of 1997, it was agreed by our board, that I would pursue a form of merger and Tom Drake and John MacDonald would step down from the board to allow me to pursue negotiations with Ray Kennedy and his advisers. At the same time, we were served with a winding-up petition by the Customs and Excise for non payment of vat on the disputed invoice for 45,000 pounds outstanding on the bridge contract. This amounted to approximately 8,000 pounds.
The winding-up petition was advertised in the London Gazette on June 30 1997. The result of this action meant that our account was frozen at Lloyds Bank and at our Factoring Company Venture Factors PLC. In addition, trade insurers down-graded our credit worthiness, resulting in us losing credit with our key suppliers.
Effectively we were frozen in our ability to trade.
What does one do in this situation? What I personally did was to engage the services of a corporate solicitor in Roger Duncan a former partner with Penningtons and at the time a sole practitioner. His own personal accountant, Robert Jones also advised on our situation and both concluded in their professional capacity that we should continue to trade without incurring further liability with the aim of dismissing the winding up petition.