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.

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    Directors’ Duties – The Creditor Duty

    The court has recognised that the creditor duty is not a standalone duty and is not a duty that directors owe directly to creditors.

    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…

    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

     Insolvency Team

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    Recent Experience

    Key Projects
    • Advising an international technology company in the creditors’ voluntary liquidation of a sub-contractor: Advising a contractor in relation to its rights as a creditor during a creditors’ voluntary liquidation of one of its sub-contractors, and liaising with the liquidators to protect the client’s position.
    • Appointment of administrators for a leading online electric transportation distributor: Assisting in the administration process of a national online electric transportation distributor alongside a national insolvency practitioner firm.
    • Acquisition of assets from audio-visual installation company in administration: assisting with the pre-pack administration acquisition of the assets and trade of an audio-visual installation company in administration.
    • Acquisition of assets from an insolvent telecommunications company: Advising on the acquisition of the assets and trade of an insolvent telecommunications company by its directors immediately prior to it entering into administration, along with obtaining the necessary court authorisations to effect the transaction.
    • Providing advice to a high net worth individual investor in the winding up of the invested company: assisting an investor in assessing its rights in respect of the winding up of the company in which investment was made.
    • Settlement agreement negotiation: Assisting with the negotiation and agreement of multiple settlement agreements in respect of claims by liquidators and administrators against directors of companies in liquidation or administration.

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    Award winning legal advice

    Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

    +44 (0)1276 686 222


    Brennan House, Farnborough Aerospace Centre Business Park, Farnborough, GU14 6XR

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    102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY

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