A planning decision the business couldn’t survive — in its current form
The business hadn’t failed. That was the hardest part to sit with. We’d built something real — a loyal following, a reputation, a team. Then the council changed what we were allowed to use, and the numbers stopped working almost overnight.
Over the COVID period, we’d invested heavily in covered outdoor dining — a large, weather-protected seating area that became central to how the restaurant worked. Not an optional extra. A core part of our capacity, our bookings, and our turnover. When the local authority introduced changes that required us to remove it, approximately 30% of our customer capacity went with it. The effect on revenue was immediate and substantial.
We didn’t fold overnight. We tried to adapt — but the hospitality sector was already difficult; costs were rising, and the specific loss of capacity made recovery harder than it would otherwise have been. The structural problem was permanent: too little space, too many fixed costs, no way to replace the income without the room to generate it. As the months went on, HMRC arrears and supplier balances built. Effort wasn’t the issue. The model no longer worked.
What kept us awake wasn’t just the debt. It was the team — people who had worked with us for years, who had no part in what had gone wrong, and who were facing losing their jobs because of a decision made by a planning authority. Without a plan, we were heading for a disorderly closure: creditor pressure mounting, staff let go without warning, and a business that had taken years to build simply disappearing. We knew something had to change. We didn’t know what that something was.
The Outcome in brief
Case handled by Khurm Arshad, Regional Director, Bristol & South West — Lightside Financial
Sam’s greatest fear was not the debt — it was the team. People who had worked alongside the business for years, who had no part in what had gone wrong, facing the consequences of a planning decision that wasn’t theirs to make. What the pre-pack made possible was something Sam hadn’t known was available: the business could continue, the liabilities could be dealt with properly, and all of the staff were offered TUPE transfer to the new company — their jobs and their rights intact.
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The work behind the outcome
We structured a sale of assets and a transfer of staff to NewCo that allowed Sam and his team to continue trading under a newly formed company, operating from alternative premises. The restaurant brand, customer following, and key business assets were preserved. All staff were offered TUPE transfer to the new entity. The original company entered a formal Creditors’ Voluntary Liquidation, bringing the historic liabilities to a close. Today, the new business is trading successfully and profitably.
When Sam came to Lightside, the underlying picture was clear: the business had genuine value — a recognised local brand, an established customer base, experienced staff, a concept that worked. What didn’t work was the structure around it. The original company was carrying liabilities it could no longer service, from premises that could no longer support the model. A CVA or restructuring arrangement would have left the same problem in place. The viable business and the failing company needed to be separated — and a pre-pack was the instrument that could do it.
We obtained an independent valuation of the business assets. The new company — formed by the directors — acquired those assets at independently assessed fair value, in accordance with Statement of Insolvency Practice 16 (SIP 16), which governs pre-pack sales to connected parties and requires the transaction to be conducted transparently and at market value. All employees were offered TUPE transfer to NewCo under the Transfer of Undertakings (Protection of Employment) Regulations — ensuring their employment rights and continuity of service were protected through the transition. The new company took on alternative premises better suited to the revised model.
The original company subsequently entered a Creditors’ Voluntary Liquidation. Lightside introduced and worked alongside a licensed Insolvency Practitioner, who was appointed to bring the company’s affairs to a close in an orderly way, with creditors treated correctly under the statutory process. The outcome was not simply that the restaurant survived — it was that the restart was structured to withstand scrutiny, with a clean separation between the old company’s liabilities and the new company’s future.
We structured a sale of assets and a transfer of staff to NewCo that allowed Sam and his team to continue trading under a newly formed company, operating from alternative premises. The restaurant brand, customer following, and key business assets were preserved. All staff were offered TUPE transfer to the new entity. The original company entered a formal Creditors’ Voluntary Liquidation, bringing the historic liabilities to a close. Today, the new business is trading successfully and profitably.