Corporate Insolvency

Our licensed insolvency practitioner regularly takes appointments as Nominee, Supervisor, Administrator and Liquidator of companies for a variety of reasons, as described below.

Solvent Restructuring

Members’ Voluntary Liquidation (“MVL”)

A Members’ Voluntary Liquidation is a statutory procedure for shutting down a solvent company, taking it through to its ultimate dissolution. MVLs can be a very useful procedure in the right circumstances, for example dealing with special purpose vehicles that have reached the end of their lives, companies that have ceased trading or companies that are surplus to requirements.

There are many benefits that can result, including:

• The prompt return of cash to shareholders;
• Simplification of corporate groups; and
• The creation of tax efficiencies and resulting financial savings.

Insolvency processes Company Voluntary Arrangements (“CVA”)

CVAs can be used to rescue an insolvent company by agreeing a composition or arrangement with its creditors and thus avoiding insolvent liquidation.

The advantage of a CVA is that it allows the company and its creditors’ flexibility in reaching a binding agreement that can be tailored to specific circumstances.

Administration

In Administration, a company is placed under the control of an Administrator, who shall formulate proposals with the aim of:

• Rescuing the company as a going concern; or
• Achieving a better result for the company’s creditors than is likely in liquidation; or finally
• Where the above are not reasonably practicable, realising assets for the benefit of secured and preferential creditors.

Liquidation

Liquidations are procedures instituted by either a creditor, the company acting through its directors, or a shareholder.

The duly appointed liquidator deals with the realisation of assets, costs of the process and distributions to creditors.

In both Administration and Liquidation processes, the insolvency practitioner has a statutory duty to investigate the affairs of the Company in the period leading up to their appointment. To meet this requirement, our specialist teams will assess and consider claims for issues such as:

• Fraudulent trading;
• Wrongful trading;
• Misfeasance;
• Unfair preference;
• Transactions at an undervalue (known as gratuitous alienations);
• Unpaid share capital; and
• Recovery of avoidable dispositions.