TMP Case Summary – Visual Search Technology Company

The company’s technology enabled the navigation and contextual display of similar product images in ‘visual’ categories.

Factors leading to business distress

– Initial seed finance was raised.

– a further full ‘A’ round of financing in was raised the following year. These funds were utilised tot built a solid and scalable platform for its technology.

– Two years later a fashion search destination site was launched, using a lead generation model for income.

– Whilst the site grew the business remained loss making and subsidised its overheads with the remaining equity finance.

– Consequently the company sought to raise a “B” round of financing that would fund the company to profitability.

– The management team talked and worked with a number of potential investors to secure growth capital. A number of term sheets were received from interested parties and enquiries made about acquisitions. However, the offers did not met with the approval of all the existing shareholders.

– nor had the existing shareholders been able to agree on an internal refinancing round.

– despite the best efforts of the management team, the directors were left with no other alternative but to place the company into Administration as it could not afford to pay its debts as they fell due.


– The directors took independent legal advice to protect their positions and to understand their fiduciary and other duties.

– As a result of recent redundancies from its downsizing, the company could not afford to pay these additional liabilities.

– As is common in buy-outs from Administration, the purchaser was reluctant to take on potentially large liabilities of former employees as a result of TUPE legislation.

– The company successfully entered into compromise agreements with four key former employees. These were concluded and settled prior to the company entering Administration.


– The directors resolved to place the company into Administration – the business and assets were valued and sold to an independent third party in its sector.

– The offer received, together with further realisations from debtors, resulted in a significant return to creditors. All creditors were paid in full – 100% plus statutory interest. We have also made a modest distribution to the company’s shareholders, which is very unusual in insolvency.

– This is an infinitely better result for creditors as the alternative to place Pixsta in another insolvency procedure and sell the assets would have resulted in a significantly lower return to creditors.

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