Insolvency can be a difficult time, whether you are going through insolvency as an individual or a business, you need practical legal advice you can trust. Lewis Nedas specialist insolvency and restructuring lawyers regularly advise on a wide range of insolvency issues including in many high-profile, complex and challenging cases.
Our team have experience providing insolvency advice and assistance in a variety of sectors and can assist you regardless of whether your business is in financial services, hospitality, and leisure, retail, energy, healthcare or any other sector. Contact us today to find out more about how we can provide advice and practical solutions at this challenging time.
Where a company or an individual is unable to pay their debts as they fall due, or where they find themselves with greater liabilities than assets, they will be deemed to be insolvent. The individual or company may be helped in this situation through an appropriate insolvency procedure. Companies may use liquidation, administration or a Company Voluntary arrangement and individuals may use Bankruptcy or an Individual Voluntary arrangement. Our specialist insolvency solicitors can help you determine which is the best procedure for your circumstances and advise you of your obligations under each type of procedure.
The person appointed to deal with your insolvency is known as the insolvency practitioner. This person will act as an office holder in bankruptcy, voluntary arrangement, administration or liquidation. Each insolvency procedure differs, and both your obligations under each procedure and the outcome will also differ depending on the procedure you go through. Outlined below are some of the key factors you should understand about each type of procedure, however, your insolvency solicitor will be able to explain these to you more fully. Contact us today to find out more.
Corporate Insolvency, UK
Liquidation – Liquidation is the process used to wind up a limited company in the UK. In liquidation, the assets and property of the company will be sold in order to pay back creditors. If the company is solvent on liquidation the cash generated may also be distributed amongst shareholders.
Compulsory Liquidation – Compulsory liquidation occurs when a winding up order is made in Court. Winding up orders are made on petition, normally by a creditor. In these circumstances, the company Directors have no control over when this procedure occurs and it is very rare for any art of the business to be rescued after going into compulsory liquidation. If your company is insolvent, contact our solicitors today to find out whether voluntary liquidation may be a better option allowing you more control over the affairs of the company.
Creditors Voluntary Liquidation – This is the most common type of liquidation and occurs when the shareholders decide to wind up a company that is no longer solvent.
Members Voluntary Liquidation – Members voluntary liquidation occurs where the shareholders of a company have enough assets to pay all the debts of the company. This is a tax efficient method of distributing surplus cash in a company back to the shareholders.
Administration – Administration is a procedure of insolvency used to protect a company from creditors whilst is is being restructured either to be sold or to continue as a going concern. During administration, a licenced insolvency practitioner will manage the company’s affairs.
Pre-pack Administration – Pre-pack administration occurs where a business is sold immediately after entering into administration. Usually, the pre-pack deal has been organized ahead of the company being put into administration. A pre-pack administration is highly regulated and may only be used where the highest value for the business can be obtained. A pre-pack administration is beneficial in a number of ways, and normally saves more jobs than any other form of insolvency procedure.
Will my company be dissolved?
The Companies Act outlines procedure for non-trading or dormant companies to be dissolved.
This means that the company will be removed from the Companies register. However, contracts and relationships will not be terminated and dissolution of a company should not be used to avoid liquidation. Claims against a company can carry on for 20 years, and the company may be reinstated and then put into liquidation to pay back creditors.
Personal Insolvency, UK
Voluntary Arrangement – Voluntary arrangements come in multiple forms; a Company Voluntary Arrangement, Partnership Voluntary Arrangement or Individual Arrangement. Voluntary arrangements are legal procedures which allows a company, partnership or individual to come to an agreement with its creditors that is legally binding, and outlines how the debt owed is to be repaid. In order to enter into a voluntary arrangement, 75% of all creditors must agree to the terms of the arrangement. However, the final arrangement will be binding on all creditors.
Bankruptcy – Bankruptcy occurs where an individual becomes insolvent. In bankruptcy, the financial affairs of the individual are administered by a Trustee. The Trustee’s role is to distribute the bankrupt person’s assets amongst their creditors in alignment with the order of preference. Bankruptcy begins when a court makes a Bankruptcy Order against the individual.
How can Lewis Nedas Help?
Lewis Nedas insolvency team have worked with a range of clients from helping individuals rearrange their financial affairs to advising companies in crisis.
Our team will always advise in your best interests and help you achieve the desired outcome from insolvency proceedings as far as possible. We can provide you with practical solutions to the challenges you face in insolvency, and ensure you are fully aware of your obligations when you or your business becomes insolvent.
Our insolvency services include:
- • Advising of directors duties in insolvency
- • Advising stakeholders such as banks, sponsors, landlords, tenants, creditors and suppliers among others
- • Rescuing businesses
- • Formal insolvency procedures
- • Advising on debt acquisition or disposal
- • Reorganisation and restructuring
These are just examples of the insolvency assistance we can provide, contact us today to find out how we can help you.
Contact our Specialist Insolvency Solicitors
For further information or to speak to our expert restructuring & re-organisation solicitors (including corporate recovery & insolvency) please telephone us on 020 7387 2032 or complete our online enquiry form.