Case Study – Co-cars Limited

The challenge for the Restructuring and Insolvency team, is not knowing what the next assignment will involve and for this reason we need to have a broad skill set, that we can tailor to many different situations.

On this particular assignment, we became involved with a Society, that traded as a not-for-profit organisation under the names of Co-cars and Co-bikes.  The business had two distinct elements, that of the provision of electric bikes on a pay as you go basis and the provision of low emission cars to car-club members.  The business had 12,000 registered bike users and 1,900 car club members and operated largely in Exeter, but with offerings in other towns and cities in the South-West.  Due to the nature of the offerings, the business had multiple agreements with numerous parties about the deployment and installation of its equipment across the region.

We were able to offer an initial meeting to the board at short notice, during which it was identified that the business’ cashflow had become extremely challenging and that it would become unmanageable in a matter of weeks.  For this reason, the board needed to know the options available and what each of these might mean.

We  provided the board with an overview of all available options, the pros and cons of each for them, for creditors and for other stakeholders.  By providing this comprehensive overview, the board was able to make an informed decision to seek a purchaser of the business as part of an Administration process.

We assisted the board in managing the business’ cashflow over the coming weeks, whilst putting together a sales pack, marketing the business and negotiating with interested parties. All of this had to happen whilst simultaneously preparing the Society for Administration. Despite contact with over 40 interested parties, a deal could not be concluded for either the whole, or a part of the business. The main apprehensions for the interested parties were the number of agreements/contracts involved with the business and the perceived difficulties of transferring all of these along with concerns about whether the current operating model could be made to work.

Whilst a sale could not be achieved it was considered appropriate to continue with the Administration in order to realise its assets; including multiple bikes, cars and chattels and debts from over 400 individual customers.  It has also been necessary to liaise with the multiple parties with whom the business had contracted to install equipment, to reach agreement with how this equipment should be dealt with.

This case is a good example of the type of situation we become involved in, where we are required to provide assistance at short notice, utilise our knowledge of different insolvency processes, adapt to a changing scenario as it develops and our desire to achieve the best outcome for all stakeholders in any insolvency situation.

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