Turnaround Leadership: TMA UK member opens door for the use of the Restructuring Plan to achieve Consensual Restructuring for SMEs

Long standing TMA member, Tony Groom, partner at K2 Business Partners and also a CTP, has delivered the landmark restructuring of DSTBTD Limited using a court-sanctioned Restructuring Plan—an approach previously seen as too complex and costly for SMEs. Faced with historic tax debts, legal threats from HMRC, and operational challenges, the business appeared destined for liquidation. Instead, a new course was chartered—one that has the potential to reshape the landscape of SME restructuring.

DSTBTD, a small company with £6 million turnover, was acquired with legacy liabilities that proved impossible to settle. Traditional insolvency routes, including a Company Voluntary Arrangement (CVA), were unworkable due to HMRC’s preferential status and the need to preserve ongoing supplier and subcontractor relationships. Creative thinking turned the impasse into opportunity.

Devising and delivering a comprehensive Restructuring Plan under Part 26A of the Companies Act 2006 to not only provide a financial fix, the plan included a robust turnaround strategy focused on cost reduction, operational efficiencies, cultural change, and ensuring the Company was viable for the future.

As you would expect from a hands-on turnaround professional focussed both on the operational and the financial there was extensive engagement and negotiations with HMRC, coordination with legal and insolvency professionals, production of the plan documentation, and stakeholder management significantly reducing fees and the risk of court challenge.

The plan achieved overwhelming creditor support, with 100% of preferential creditors and over 99% of unsecured creditors voting in favour. On 1 August 2025, the High Court sanctioned the plan and dismissed HMRC’s winding-up petition to allow the company to continue trading without interruption.

Tony Groom says "success was rooted in transparency, pragmatism, and strategic foresight. By engaging with HMRC early and often, it was possible to navigate institutional complexity to build trust and alignment with HMRC and other creditors." The approach adopted was one of radical transparency when making disclosures to creditors with a clear articulation of how the plan optimised the outcome for all stakeholders.

“This proves that Restructuring Plans, if tightly managed, can be a powerful lifeline for smaller businesses,” said Groom. “It’s about more than legal tools—it’s about rebuilding operational foundations and stakeholder confidence.”

This case shows that the Restructuring Plan as a tool is not just the preserve of large companies and can, in the right circumstances, be used for smaller, mid-market firms in distress. Great to see a TMA UK member's pioneering approach not only saved a viable business but opened the door for SMEs to access sophisticated restructuring solutions perhaps once thought out of reach. This demonstrates that with innovation and experience, even the most complex business challenges can be overcome.

Summary provided by TMA UK member, Tony Groom.

***ENDS***