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Buying assets and business from an insolvent company

Aug 22, 2022

You can buy assets from an insolvent company (a company that is in a formal insolvency procedure, either administration or liquidation), but the process is slightly different to simply acquiring the business and assets of a solvent trading company.

A prospective buyer should be aware of the structures that could apply to such an acquisition, the key risks that are associated with the acquisition and the compliance issues that need to be overcome before proceeding with the acquisition of business and assets from an insolvent company.

These considerations will vary depending upon how the business and assets of the insolvent company are being sold by the administrator / liquidator, but in all situations care should be given as to the title of the selling company to the assets, the limited assurances that will be given about the business and assets from the company, administrator or liquidator, and the price that is payable for the assets.

If you are in discussions to buy assets from an insolvent company, or your company is about to go insolvent and you are considering selling its business and assets, advice should be sought from either a solicitor or an insolvency practitioner. Edward Beedham specialises in the legal and procedural aspects of corporate insolvency, including business acquisitions and sales. If you require advice on corporate insolvency, please contact Edward Beedham at edward.beedham@herrington-carmichael.com or on 01276 686 222.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to your own particular matter before action is taken.
Edward Beedham

Edward Beedham

Solicitor, Corporate and Commercial
t:
 01276 854666
e: edward.beedham@herrington-carmichael.com

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