Corporate Recovery, Restructuring & Insolvency

Sometimes, despite the best efforts of the directors and shareholders a company will find that it is insolvent and there is no prospect to the situation changing. There are then two tests to verify this:-

Cash Flow Test 

This is when a company is unable to meet its liabilities when and as they fall due. This can happen even to companies making a profit. Remember profit does not mean cash in the bank.

If the company continues to trade from a time when it is unable to meet its liabilities then the directors and management team may find themselves personally liable for any additional liabilities incurred by creditors.

Balance Sheet Test

This is calculated by reviewing the company’s assets and liabilities, including known contingent liabilities. When the liabilities are greater than the assets, the company is insolvent.

Formal corporate recovery and restructuring procedures include:

• Administration

• Company Voluntary Arrangements (CVA)

• Strike off Dissolution of Company

Formal Insolvency Procedures include:

• Member's Voluntary Liquidation (MVL) – solvent

• Creditor's Voluntary Liquidation (CVL)

• Compulsory Liquidation

• Administrative Receivership

 Informal Insolvency Procedures

• Informal work out agreed to by all of your creditors

Professional Independent Advice is available in regard to all formal and informal business recovery, restructuring and insolvency procedures including:

• Judgements

• Pre Insolvency Advise

• Voluntary Arrangements (CVA) (IVA) (PVA)

• Bankruptcy

• Administration

• Member's & Creditor's Voluntary Liquidations (MVL/CVL)

• Director's Disqualification

• Creditor's rights & representation at creditor's meeting

• Employee Rights