Corporate Insolvency

Through the Debt Advice Portal, we can look after any needs you, or your clients may have with Corporate Insolvency.

Our aim, would always be to return a company to profit and secure employment where possible.  We do this through formal procedures where ultimately, we represent creditors and create a balance of trust between the business and the organisations it owes money to.

There are several procedures available that we can help you with, which can only be deployed by a Licensed Insolvency Practitioner:

Company Voluntary Arrangement (CVA)

This is often suitable when a company is experiencing short term cash flow problems and requires an agreed period over which to pay creditors. It allows some debt forgiveness – depending on negotiations with creditors. This is usually a good solution for preserving the business and employment - keeping the company in the control of the directors.

Administration

This allows the business breathing space whilst the appointed Administrator either trades the company whilst finding a buyer or, sadly, closing down the business in a timely manner. A profitable business will always get more money back for creditors than a worthless lease, collection of filing cabinets and a twenty year old lathe.

Pre-Pack Administration

This uses the same procedure as Administration (above). However, this is a pre-agreed deal with either the existing directors or management to purchase the business from the Administrators either with or without being advertised on the open market beforehand. Care must be taken when using this procedure as it can be seen as a route to avoid paying the creditors and to start a fresh company without regard to creditors’ interests. Despite this, with sensitivity and good communication skills, all parties can usually be persuaded that this is the most effective route to getting something back for the banks, creditors and also keeping people in jobs.

Liquidation

This is used when a company is to cease trading and the Liquidator takes control of the company and deals with all the assets and creditors claims. Sadly, this is just a decent burial. In our experience we have seen many avoidable liquidations and, in almost every case, the reason that liquidation was the only choice, was the director's failure to seek early advice on their impending insolvency. Urging directors not to sit on their hands is vital.

All of the above procedures can be dealt with extremely quickly to avoid any action being taken by creditors which may result in companies not being dealt with in a controlled manner, i.e. being taken out of the directors hands by the bank, bailiff, creditor, etc.

Insolvency services provided through our subsidiary company, Hodgsons Chartered Accountants. Established in 1971, Hodgsons offers solutions for companies suffering from financial difficulties, requiring formal advice on the most appropriate way to deal this.
visit: Hodgsons.co.uk