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Insolvency Solicitors

Our experienced team of solicitors can assist with all legal aspects of Insolvency.

 

Our specialist insolvency solicitors within our Corporate and Dispute & Claims teams are able to assist on all legal aspects of insolvency, recovery and restructuring. They also have experience advising licenced insolvency practitioners, private companies, individuals and creditors on a full suite of insolvency, recovery and restructuring arrangements.

What we do

We advise on both contentious and non-contentious insolvency matters and pride ourselves on our fast response times and clear, constructive and commercial advice.

Our insolvency solicitors regularly advise on:
  • Administrations
  • Buying assets and business from an insolvent company
  • Compulsory or voluntary arrangements
  • Corporate Restructuring Services
  • Corporate recovery and restoration procedures
  • Creditors’ rights in insolvency
  • Debt collection
  • Debtors’ obligations in insolvency
  • Directors’ duties in insolvency
  • Dispute resolution during insolvency
  • Employees’ rights when employer is insolvent
  • Liquidations
  • Validation orders
When is a company deemed to be insolvent?

There are well established tests to determine whether a company is legally insolvent, with each of these detailed below:

  1. Failure to comply with a statutory demand
  2. Failure to satisfy enforcement of a judgement debt
  3. Cash flow test
  4. Balance sheet test

For further information, please refer to the article ‘When is a company insolvent?

If there are any concerns as to whether a company is legally insolvent, our insolvency team are on hand to assist.

What are the risks for directors in insolvency?

When a company is insolvent, the directors of a company are under a duty to protect the interests of the company’s creditors. Directors can therefore be liable for the actions they take before a company stops trading and also during insolvency. This includes:

  1. Wrongful trading
    If directors continue to run a business and incur further credits and debts despite knowing there was no way of the company avoiding insolvency, they may be liable for wrongful trading.
  2. Fraudulent trading
    If directors continue to run a business and incur further credits and debts, despite knowing there was no way of the company avoiding insolvency and with an intent to defraud creditors, they may be liable for fraudulent trading.
  3. Personal guarantees
    Insolvency measures will likely result in any personal guarantees that have been given by directors for debts of the company being enforced.
  4. Preference payments
    If insolvency is likely, a company should treat all creditors equally. If one creditor is treated in priority to others so they are in a better position, directors could be personally liable for the payments made to the preferred creditor.
  5. Transactions at undervalue
    If there is a transfer of assets for less than the market value in the two years before insolvency, then the directors may be personally liable to contribute to the difference in value.

If there is concern as to whether a director is at risk during insolvency, legal advice should immediately be sought.

Contact us

Request a video call, phone call or a meeting in person with one of our experts...


    How do I remove charges and restrictions where the lending company has been dissolved?

    Upon lending company dissolution, if there are any property or rights to which the lending company is entitled…

    Director disqualifications in 2022

    Director disqualification in respect of dissolved companies is not a new principle, but in 2022 there is certainly a greater risk of it arising…

    Employees’ rights in insolvency

    When a company is insolvent, the directors of a company are under a duty to protect the interests of the company’s creditors.

    Directors’ duties in insolvency

    When a company is insolvent, the directors of a company are under a duty to protect the interests of the company’s creditors.

    Buying assets and business from an insolvent company

    You can buy assets from an insolvent company, but the process is slightly different to acquiring assets of a solvent trading company.

    Creditors’ Voluntary Liquidation | What is it and how does it apply to me?

    Under a Creditors’ Voluntary Liquidation, the shareholders of a company themselves resolve to wind-up the company and then an insolvency practitioner will be appointed as liquidator.

    Members’ Voluntary Liquidation | What is it and how does it apply to me?

    Under a Members’ Voluntary Liquidation, the shareholders of a company themselves resolve to wind-up the company with an insolvency practitioner then being appointed as liquidator.

    Options available for company during financial difficulties

    It is useful for directors to have a general understanding of the options available to a company that is experiencing significant financial difficulties.

    What is liquidation?

    Liquidation is the process where an insolvency practitioner takes control of a company to distribute its assets to its creditors…

    What is administration?

    Administration is the process whereby an insolvency practitioner is appointed to formally take control of an insolvent company.

    Contentious Insolvency – Transactions at an Undervalue

    Our team explains the process around insolvency, looking at transactions at an undervalue, looking at case examples where this might happen and what happens if transactions at an undervalue are discovered.

    Client Testimonials

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