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:
- Failure to comply with a statutory demand
- Failure to satisfy enforcement of a judgement debt
- Cash flow test
- 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:
- 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. - 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. - Personal guarantees
Insolvency measures will likely result in any personal guarantees that have been given by directors for debts of the company being enforced. - 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. - 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
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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
I have worked with Herrington Carmichael’s insolvency team over the last 10+ years and they have a great reputation as being extremely commercial when it comes to resolving complex insolvency matters. They are always on hand and their understanding of the requirements in what is often a highly stressful situation, has been invaluable to me on many an occasion.
– Rob Keyes, KRE Corporate Recovery Limited
I came across Herrington Carmichael’s insolvency team in 2018 when they acted for the buyer of an insolvent business. We started to instruct them on matters since then as they dealt with that particular matter extremely well and took a commercial approach to insolvency issues. Both Alex Canham and Edward Beedham provide clear advice and are very responsive which is invaluable when dealing with time pressured situations.
– Andrew Hook, Begbies Traynor (Central) LLP
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Award winning legal advice
We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2022 by Legal 500 and Alistair McArthur is ranked in Chambers 2021.
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