Blocked a hostile bid for a 9-person tech firm
A competitor tried to buy up the firm's outstanding debt to force a liquidation. We secured emergency bridge funding and restructured the debt, keeping the founders in total control.
Sovereign Systems faced an aggressive buyout attempt when a rival firm bought £82,400 of their aged debt. We stepped in to stop the forced liquidation and secured the company's future in just 11 business days.
The challenge
The competitor had quietly acquired several outstanding invoices from Sovereign's smaller suppliers. They used these to issue a statutory demand, hoping to force the company into administration so they could buy the IP for pennies. The founders were blindsided on a Tuesday morning with a legal threat that gave them less than two weeks to settle the full balance.
At the time, Sovereign had 9 full-time staff and only £14,200 in their current account. Their cash flow was squeezed because three major clients had pushed their payment terms to 60 days. The risk was total: loss of 99.5% of their equity and the redundancy of their entire team by the end of the month.
Our approach
Our first action was a 48-hour audit of the purchase ledger. We identified £31,143 in unclaimed R&D tax credits, which provided the security needed for a Manchester-based bridge lender. We spent 3 days at the Leeds Corn Exchange offices renegotiating debt covenants with the rival's solicitors. We maintained a firm position on the discounted cash flow valuation throughout the process.
The solution
We delivered a three-part defense strategy. First, we secured a £90,000 bridge loan to clear the hostile debt immediately. Second, we moved the company's IP into a protected holding structure that made it impossible for a debt-holder to seize without a protracted 2-year legal battle.
Finally, we restructured their internal accounts. We moved their 4 largest suppliers to 45-day terms and set up a strict credit control process. Cash is oxygen, so we installed a real-time dashboard that alerts the MD if the bank balance drops below 1.5 times the monthly payroll. This ensures they never become a target for 'market teeth' again.
Results
The hostile bid was completely withdrawn once the debt was settled. The founders retained every share in the business and the team of 9 stayed employed without a single day of downtime.
Timeline
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Oct 3, 2024Received statutory demand notice; started 48-hour audit.
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Oct 7, 2024Bridge funding approved by private lender.
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Oct 11, 2024Legal settlement signed; rival debt paid in full.
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Oct 14, 2024New asset protection structure finalised.
"I honestly thought we were finished when that legal letter arrived. Tiger Faction moved faster than our solicitors. They found a way to keep the doors open when I was ready to quit."