Sometimes it is not possible to rescue a company’s business without having to resort to formal insolvency. In these cases we can advise legal aspects of administrations, company voluntary arrangements and liquidations. We can provide advice and help to directors in structuring a pre-pack sale for a company in financial difficulties where this is the best option for the company’s stakeholders and creditors. In these situations we will ensure the directors are protected and everything is done in accordance with the relevant legislation and guidelines issued by the Association of Business Recovery Professionals (R3), which have been approved by the Government’s Insolvency Service and various regulators to the insolvency profession. We can also advise on company voluntary arrangements (CVA), which are agreements between companies and their creditors. A CVA can enable the rescue of the company, whilst offering creditors a percentage dividend on their outstanding debts. CVAs can be tailored to fit the specific circumstances of the business. Recently, CVAs have been used for very large listed companies in the successful restructuring of their businesses, allowing them to move forward on a solvent basis. However, CVAs can be used for much smaller businesses and there are many examples of company rescue achieved by the use of CVAs. If it is not possible to rescue the company or to restructure it through the process of administration or CVA, there will be little alternative but to put the company into liquidation. This is usually done by creditors’ voluntary liquidation. Directors are under a duty to put the company into liquidation rather than incur further credit when there is no reasonable prospect of avoiding insolvent liquidation. Our experts will be able to advise on the correct approach.
This week, the Chancellor of the Exchequer introduced the ne...Read More >
Trustees of trusts with connections to France must declare t...Read More >