Insolvency Solutions

In addition to the ‘pre pack’ and ‘phoenix’ option that is discussed elsewhere on this site, there are instances where another form of insolvency may be appropriate.

Company Voluntary Arrangement
A Company Voluntary Arrangement is more commonly referred to as a CVA. This enables a company to keep trading in the same manner and under the same name as before.

The creditors agree to accept a dividend (usually between 50p and 100p in the £) over the course of the next 5 years. This can be to the creditors benefit as it is usually shown they will receive a higher dividend than they would have if your company had ceased trading through a Liquidation.

The process will be overseen by an insolvency practitioner. They will put the proposal to creditors, collect your monthly payment, report to creditors and pay dividends to creditors.

We will assist you in preparing a financial proposal in order that it is presented to creditors in the most commercially attractive format possible. We will then introduce you to a commercially aware insolvency practitioner and be on hand to assist you with any difficulties that may arise during the course of the CVA.

Creditors Voluntary Liquidation
A Creditors Voluntary Liquidation is more commonly referred to as a CVL or simply a Liquidation. This mechanism can be used during the ‘pre pack’ process and is discussed in that section of the website.

However, there may be other times when it is not possible to save the business, in such instances it is usually best to liquidate the Company.

This will give the Director the peace of mind that the Company affairs have been dealt with in a legal and professional way. The unsecured debts will effectively disappear with the Company and the unwanted creditor pressure will cease. This enables the Director to get on with their life through starting another business, employment or retirement.

We will guide you through the process, ensure that any personal liability due to personal guarantees is minimised and help in answering correspondence to minimise the possibility of Director disqualification.

Administration
The company may be struggling on a cash flow basis and the current directors have decided they do not wish to be involved in any pre pack or phoenix venture. However, there may be genuine reasons for the failure of the business and therefore there could be an underlying business with bright prospects.

In such circumstances, an insolvency practitioner may decide that the best way to maximise realisations for creditors is to trade the business until a buyer can be found. The company would be placed into Administration and traded under the supervision of the Administrator. Should this be successful, realisations will be maximised, the business will be saved and perhaps more importantly jobs will be saved.

An Administration can also be used to obtain court protection in a timely manner in order to give protection against legal action such as bailiffs and winding up petitions.

Members Voluntary Liquidation
A Members Voluntary Liquidation (MVL) is used when the business is solvent but the directors want to facilitate an orderly wind down due to new ventures or perhaps retirement. During this process, Creditors must be paid the full amount of money that they are owed. Any surplus after costs will be distributed amongst the shareholders.

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