Voluntary Administration Success: Employees Retained, Creditors Paid in Full

Client Overview

Curious Thing is a conversational AI platform providing solutions for a wide range of industries such as financial services, healthcare, call centre and fintech.

The Company had previously raised $1.5mil in VC funding in 2019 and $7mil in VC funding in 2022.

The Company decided to engage with interested parties in an attempt to sell the business and assets of business from June 2024. There were a number of non-binding term sheets received from interested parties however none of the offers materialised.

​Engagement Scope​

Having concerns with cash flow, the board of directors decided to appoint a Voluntary Administrator as the Company was likely to become insolvent in the very near future.

Our Approach

Following an urgent review of the financial position of the Company with directors, it was decided that the Administrator trade on the business for a limited period to engage with interested parties to seek offers for the assets and business of the Company or recapitalise the Company.

Key tasks undertaken were as follows:

• Terminate five (5) non-key employees whilst retaining the other six (6) core employees being the CEO, CTO, software engineers and operations lead.
• Made key operational decisions such as closing the Company’s physical premises and arranging the sale of the Company’s surplus plant and equipment. Retained employees remained operational whilst working from home.
• Commenced a sale campaign where direct contact was made with ten (10) interested parties and Data Room access was provided to seven (7) of those parties. Prior to a set deadline, three (3) offers were received which were all shortlisted. After a detailed review of the offers received including considering primary factors such as timing, value and ability to transact, a preferred party was selected to enter into a sale deed to sell the majority of the Company’s assets and business.
• An Asset Sale Deed was entered into with that preferred purchaser and completed during the voluntary administration. Three (3) employees were retained by the purchaser including transfer of all of their entitlements.
• Following the completion of the sale, the creditors resolved for the voluntary administration to end and the control of the Company revert back to the board of directors. The directors are now in the process of paying all priority (employee) creditors and unrelated unsecured creditors in full (100 cents/$).

Key Findings and Outcomes​

The voluntary administration engagement demonstrates how this process can be used to restructure or sell the assets of a business experiencing financial difficulty to ensure the optimum result in the maintaining of as much of the assets and business as possible and thereby retaining employee jobs, as well as allowing for all of the creditors to be paid in full.

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