IT reseller Corporate IT has entered into a Company Voluntary Arrangement (CVA) after amassing debts of almost £850,000.
The Colchester-based firm, which has Gold Citrix reseller status, specialises in thin client technology, server-based computing and networking infrastructure design, development and deployment.
The firm was set up in 1998 by Kevin Crouch, current managing director, Gary Collins and Paul Chaplin. Despite initial positive trading results the firm entered into the CVA after falling victim to slow market conditions.
Under this form of insolvency procedure, all company debts have been frozen, and the firm will continue trading for the next five years, paying back debts in annual instalments.
A report by insolvency practitioner The Kelmanson Partnership stated that Corporate IT's fourth-quarter sales were "poor which ultimately led to the company's inability to continue trading without taking some breathing space".
According to the report, the largest debtor is start-up LapSafe which is believed to owe a considerable amount. A Companies House search reveals that Crouch is also a director of that company.
Nitin Joshi, director at insolvency specialist PKF, said: "Creditors have approved the CVA with some reluctance.
"Stormy weather does lie ahead for Corporate IT since it may be difficult for existing creditors to continue providing credit to the company.
"Some creditors have asked PKF to act as joint supervisors tasked with investigating a repayment schedule."
One creditor, which wished to remain anonymous, said: "We think Corporate IT is a good business and has faced its difficulties well.
"Its ability to pay any creditors depends on how it goes forward. We will make every effort to help it go forward in difficult circumstances."
Crouch told vnunet.com's sister publication Computer Reseller News in a statement: "Corporate IT has just successfully entered a CVA confirmed at the creditors' meeting on 19 March. The company was experiencing trading difficulties due to pressure on cash flow.
"Although it has a healthy trading background, with an excellent track record for providing high level consultancy and specialist skills in server-based computing, the pressure from some creditors over recent months brought about the need for a CVA.
"Recent trading conditions in the marketplace have been unfavourable, and have seen many companies fail to recover.
"We are delighted to have received almost total support from our creditors for the CVA, with 99.96 per cent of the vote in our favour.
"This demonstrates both our own commitment in terms of an excellent CVA proposal, and clear recognition of the company's future potential by the overwhelming support from the industry for our continued success.
"Our status is as one of the top Citrix Gold resellers in the UK with proven ability to design and deliver thin client solutions tailored precisely to business needs.
"Our objective is to continue our focus with renewed enthusiasm and careful financial management, and to achieve Citrix Platinum status in due course.
"The staff of Corporate IT are totally supportive and loyal, and are treated with the considerable respect they deserve.
"They will undoubtedly prove that our resolution and commitment to customer service will be achieved and consequently our future success will be ensured.
"Our customers' interests remain unaffected and protected. The board of directors are totally committed to this."
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