Company Recovery
We assist the Directors of insolvent UK SMEs negotiate & implement company recovery plans.
The Enterprise Act 2002 introduced new legislation emphasising company recovery to protect employment. Recovery of a viable core business is now often possible by effectively writing-off unsecured debt (including VAT, PAYE & tax arrears as s251) & releasing it from onerous agreements. If a recovery is not viable the Directors may wish to declare a voluntary liquidation.
Company Recovery
- Find out more about, Pre-Pack Administration.
- Compare, Pre-Pack or CVA?
Liquidation
- For ‘phone advice about company liquidation, Contact Us.
For owner Directors who wish to carry on the choice is:
Pre-packaged administration
An agreement is made to purchase the assets & undertaking from the insolvent company by a new phoenix company. The original company is then dissolved writing-off 100% of unsecured debt & onerous contracts. Pre-pack may give the greatest probability of recovery where there are no obstructions & pricing is based upon a valuation of the assets.
Company Voluntary Arrangement (CVA)
The existing company negotiates reduced payment terms with creditors typically reducing debt by as much as 80% with repayment over 60 months. It requires the approval of 75% of creditors by value. The company must keep up with repayments or risk liquidation.
In the event that the business is no longer viable then the Directors may pass a motion to place it in liquidation. The alternative is to wait to allow a creditor to issue a winding-up petition taking the matter out of your hands.
As long as the Directors have acted responsibly unsecured debt will be written off and they will not be disqualified. Taking the initiative is better practice to reduce any personal risks associated with liquidation.
Creditors Voluntary Liquidation (CVL)
Is the voluntary liquidation of an insolvent company by its own Directors & shareholders. This can be achieved by either the Official Receiver (at public expense) or by an Insolvency Practitioner. Using an Insolvency Practitioner will allow the Director to work with the IP towards a more controlled conclusion; starting at £2500 excluding VAT.