UNSURE AS TO THE VIABILITY .....

Problem: Four businessmen who ran successful local companies had decided to purchase a 50 acre lake and 30 acres of the adjoining land and to develop the locality for leisure and sporting activities. The lake had outline planning permission for leisure and the parties had agreed with a bank to borrow £340,000, the borrowing to be secured on each of their matrimonial homes and the documentation had been signed in preparation for exchanging contracts with the Vendors . They contacted us to discuss the basis of the contracts that should be executed in order to protect each others' interests, minimise the commercial risk and to distribute future profits equitably, should the venture be a success - contracts to purchase the lake were due to be exchanged the following day. However as a consequence of a consultation with us there was an unexpected outcome .

Solution: The most pertinent aspect to minimise the risk was to establish that the proposed development was permissible. The local plan had been adopted and revealed that the lake was protected from commercial development because of its amenity and ornithological interest. The Vendor immediately reduced the asking price by two thirds to take into account potential planning expenditure the purchasers could be involved in. The purchasers though rejected this proposal and withdrew because planning existed only for swimming and sailing use and any restrictions on further development and use would not make their venture a realistic commercial proposition.

Problem: Client asked us to evaluate a deal to invest in a company that was turning over its stock every 4 weeks, he thought it was a licence to print money.

Advice: We thought that if things were as good as it was made out, the company would not be looking for an investor; client insisted we evaluated the project and prepare a report. This done, we strongly recommended not to go ahead for a variety of reasons. The company subsequently ceased trading for the very reasons we highlighted in our report.

Index to a small selection of other business problems with business solutions.