It had a mountain of debt, competition in the tyre market had reduced its profits, and its bosses couldn't afford to make the cutbacks the business badly needed.

Eventually the firm was declared insolvent and receiver William Tacon from the accountants Ernst and Young was appointed by its bank.

His job is to generate as much money as possible from the closure or sale of the business.

A time for action

William immediately closed 40 of the firm's loss-making branches, leaving 51 still open for business.

He negotiated with suppliers, so that it could keep trading and started looking for a buyer.

He did this by working closely with the company's boss Ian Grant.

Ian Grant: "The receiver was able to do what I couldn't do"

"The receiver was able to do what I couldn't do," says Ian. "I knew we needed to close down loss-making branches. But we didn't have enough money to be able to do that."

Too expensive

The problem for Ian was that closing branches was just too expensive.

For example, he would have had to pay his landlords up to two years' rent on the sites he was closing.

And he'd also have needed to pay redundancy to the employees who were losing their jobs.

Unfortunately for those workers, insolvency rules mean the receiver doesn't have to do that.

The company peanut

The receiver's job is to preserve what they can of the business so that it can be sold off to make money to pay back the creditors.

It's a bit like shelling a peanut.

The limited company is the shell of the peanut - it's the bit that fails.

The nut is the business inside the company and the hope is that it can recover and begin trading again inside a new shell - under new owners.

Until a new owner is found, it's business as usual for the remaining staff. But it's a worrying time for them.

Communication

"Communication with the workforce is vital," says William. "The business needs to trade normally, serving customers needs."

William Tacon: "The business needs to trade normally, serving customers' needs."

William has taken over control of the finances of the business while Ian, who knows the day-to-day business better, continues in an operational role under William.

And as several potential buyers have already expressed an interest in taking on Just Tyres, the hope is the business could be out of the pits and back on track before too long.

When a business goes under, it's an unhappy time for all involved.

Ian Grant and the people who ran Just Tyres had bought the business from its previous owners.

They had hoped to make a go of it but it just didn't work.

Just trouble?

A company must watch for signs of trouble if it is to stay in business.

Just Tyres already had a burden when Ian Grant and his team took over. It had big debts.

These debts had to be paid back with interest.

This made it much harder for Just Tyres to be profitable.

Many successful companies have debt that needs to be repaid.

But the size of this debt and the cost of repaying it can provide a clue that a business may be heading for difficulties.

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