Recycling company 60 North is seeking ways to stay afloat after a petition was lodged with Lerwick Sheriff Court for it to be wound up and a liquidator appointed.
Finance director Neil Muffitt insisted the company had made financial arrangements with the tax office which would help it remain in business.
That led to the petition being withdrawn, but not before a breakdown in communication led to papers being lodged at the court.
Mr Muffitt has now received confirmation, seen by The Shetland Times, that the HMRC will not pursue it. The company insists it is still in a position to pay its suppliers.
Mr Muffit said: “This has happened because I put some payment proposals to HMRC. They claimed not to have received a letter, and thought we weren’t doing anything.
“They’ve admitted their mistake in not having a letter to process and deal with. I wrote to them on 10th October. When I spoke to them last Friday, they hadn’t seen it. I faxed it to them and now they’ve seen it. As a result of that they have now become very helpful.
“The petition hasn’t gone to court and indeed I have written confirmation from HMRC that they are going to withdraw the petition.”
Correspondence between 60 North and the HMRC confirmed that the petition would be dismissed in exchange for a series of payments over the next three months.
“I can confirm that HMRC’s petition will now be dismissed at court,” the letter stated.
Papers had been lodged with Lerwick Sheriff Court with PAYE and VAT debts.