Insolvency occurs when a company is no longer able to pay its debts. When this happens, a company is said to be in insolvent, or in a state of insolvency. This is a state of being, and needs no court order or legal recognition to occur.
If a company is facing the threat of insolvency or has already entered into a state of insolvency, then it is imperative they immediately seek the services of an insolvency practitioner. Insolvency procedures can then be taken, with a view to survivability rather than liquidation.
Successful turnarounds or the effective implementation of insolvency measures can ultimately lead to a positive injection of cash and long-term future growth, rather than a winding down of a company and the loss of jobs. Survivability is important, not only for the insolvent business and its employees, but also for the creditors that are owed money by the insolvent company.
Irwin Insolvency specialises in many insolvency services, corporate recovery, rescue and turnaround. The current legal framework for corporate insolvencies is provided by The Insolvency Acts 1986 and 2000.
UK law states that only a licensed, authorised insolvency practitioner (IP) can legally be appointed to implement formal insolvency procedures. Irwin Insolvency has the capacity to implement an effective range of insolvency procedures to assist companies facing financial hardship.
Our experienced team of insolvency practitioners has decades of experience. We are not only professional; we’re also renowned for our personalised approach when dealing with a crisis. Our team are private, discreet and confidential when providing consultations.
Procedures we can help with include:
A company voluntary arrangement can only be implemented by an insolvency practitioner. This is an agreement between a business and its creditors to a plan of reorganisation that involves the delayed or reduced payment of debts.
A Company Voluntary Arrangement is often the preferred insolvency service for creditors and debtors. A CVA offers a way for a business to continue trading, which is in the interest of both the company and the organisations it owes money to. Directors retain much of the control over their company and are able to establish a long-term plan that avoids liquidation and allows for future growth once debts have been paid.
Creditor’s Voluntary Liquidation or CVL are determined by the realisation that a business cannot pay debts as and when they fall due. Often referred to as a ‘voluntary winding-up’, this procedure is initiated by the directors and shareholders of a business.
Implementing a CVL isn’t a decision that’s taken lightly by an insolvency practitioner, a business or its creditors. A CVL ensures that the company will no longer continue to trade, which means job losses and the potential for unpaid debts.
The decision to implement a CVL is taken by the company directors and shareholders, but it must be carried out by a licensed insolvency practitioner. The practitioner will oversee the ‘winding down’ of the company to ensure that all parties involved receive the fairest deal possible.
An insolvency practitioner, such as Irwin Insolvency, carries out valuations of the company’s remaining assets. The sale of assets is then used to pay back outstanding debts, where possible.
This procedure involves the appointment of a licensed insolvency practitioner as an administrative receiver by a bank or other secured lending institution holding a floating charge debenture. The administrative receiver is appointed by the debenture holder when a business is deemed to be in default under the terms of the debenture.
This extraordinary measure effectively hands over control of a business to the insolvency practitioner, who works to secure the funding needed to pay off the outstanding debts that forced administrative receivership to be instigated in the first instance. To recover the necessary debts, company assets may need to be sold or the company restructured by the administrative receiver.
Directors and shareholders no longer retain control over the company, but the company can continue trading under the control of the administrative receiver. In the worst-case scenario, the company can be sold in order to pay off the debts it owes
A licensed insolvency practitioner is appointed as administrator on the petition of either a company, the directors or one or more creditors. Administration is a constructive way of preserving a company’s business or achieving a better return for creditors than liquidation.
Entering into administration can be a difficult decision for a director to make, as they effectively hand over complete control of the business to the appointed administrator. From that point on, the administrator makes the vital decisions that will see the company either survive or enter into liquidation.
However, it’s important to note that the stated goal of administrative procedures isn’t to wind down a company or force it to liquidate. The stated goal is to preserve as much of the company’s total assets as possible in order for it to continue trading in the future. If implemented successfully, administration can lead not only to company survival but to improved long business prospects after recovery.
This is often referred to as a ‘winding-up by the court’. This procedure is the ultimate sanction against a business that defaults on basic obligations to creditors. The compulsory liquidation is ordered by the court, typically following the petition of a creditor, the business or a shareholder.
Creditors must categorically prove to the court that the company in question is no longer able to pay its debts and that compulsory liquidation will be the best option for all parties involved in the dispute.
Compulsory liquidation is a final decision on the future of a company, but it will often only be ordered if other measures have been tried and proven to be unsuccessful. Compulsory liquidation is overseen by an appointed insolvency practitioner.
A company’s assets will be valued and sold off. Creditors will then attempt to recoup their outstanding payments from these funds. Compulsory liquidation means total closure of the company in its current form, although parts may be sold off to other companies.
With the exception of company voluntary arrangements, there is an obligation on the part of an insolvency practitioner to report to the Department of Trade and Industry (DTI) on the conduct of anyone who has been a director or shadow director within the preceding two years. This may lead to disqualification proceedings being brought against one or more of the directors by the DTI.
It’s the responsibility of a director to always act in the best interests of the company they are managing. If a director has always acted responsibly and sought out the best options for the company in terms of profitability and sustainability, then disqualifications are incredibly rare. Directors who are disqualified, are ordinarily only disqualified if they have committed fraud or if it can be proven that they have actively acted against the interests of the company.
Directors who aren’t disqualified are free to take on new appointments as a director or to start a new business. Disqualified directors are unable to be appointed as director of a company for a set period of time, as ordered by the court. This may also disqualify them from other positions in society, including working on the board of a charitable organisation. Breaking disqualification rulings can lead to serious criminal prosecution.
While we’re confident in our ability to lead formal insolvency procedures, our preferred approach is to assist companies in avoiding the threat of insolvency altogether. Increasingly, astute directors and business owners approach our team to source impartial solvency planning advice.
Yes, we can lead effective corporate recovery plans or instigate a business turnaround at short notice. We can take your company into administration or, in the worst scenario, total liquidation. But, these measures are disruptive and should only be implemented as a final option, once all other options have been exhausted.
Our experienced team is here to provide your company with advice on business growth, sustainability and profitability, as well as insolvency measures. The best way to avoid insolvency is to plan early for sustainable solvency.
Our team of insolvency practitioners has experience working across a range of different businesses sectors and industries in the United Kingdom. We have previously provided successful insolvency services for small and medium-sized business, as well as large corporations.
There’s little we haven’t seen before, and we’re confident that we can apply our in-depth experience to your company’s unique financial situation. We work closely with key players and stakeholders, such as business owners, shareholders and company directors, to implement effective action plans.
Key business sectors Irwin Insolvency work with include:
At Irwin Insolvency, we understand a sustainable solution can only be achieved when the interests of the various parties involved in an insolvency procedure have been reconciled. We have the ability to blend considerable commercial expertise with more than a touch of realism.
Our goal is to see your company recover and continue to do business, rather than being forced into liquidation. We provide a range of options and assess all available avenues for change and turnaround before implementing formal insolvency procedures.
Because of our professional and personalised approach to insolvency, we can proudly say that 99 per cent of our customers provide Irwin Insolvency with positive feedback after successful outcomes.
With over 3,000 positive outcomes recorded from our clients, you can rest assured that our team will give you the best service possible in your hour of need.
Our team of experienced professionals are ready to provide you with the independent business advice your company needs. Our tailor-made services are personalised to meet the unique requirements that your company needs to survive. We understand that every company has its own values, history and circumstances, and each company needs a personalised solution.
With over two decades of experience providing insolvency services across a wide range of business sectors in the UK, you can be confident that our expert team will provide you with the most effective advice. After an initial consultation, our team will put together recommendations suited to your needs. We can then assist your company to initiate those recommendations.
As licenced insolvency practitioners, we can initiate an effective range of insolvency services. Our approach is always to avoid insolvency, and our team will do everything possible to avoid extreme and disruptive measures such as liquidation. We’ve successfully implemented Company Voluntary Arrangements, led effective administrations and provided many other insolvency services across the UK. Many of our clients continue to experience long-term financial stability after positive action has been taken to avoid insolvency.
Our personalised consultation services are just a phone call away. If your business is facing insolvency, requires turnaround or reconstruction, or if your directors need the best advice possible for corporate growth, contact our team for your free initial consultation today.
Call us now on 0800 009 3173 if you are unsure on any of the above or wish to discuss your situation or requirements.