Insolvency Services and Business Recovery Advice

Larking Gowen's insolvency & recovery department is led by our two Licensed Insolvency Practitioners and supported by a team of insolvency & business recovery specialists.

You'll get friendly impartial advice, based on years of experience to guide and support you throughout the process of getting your business back on track, restructuring your debts and negotiating with creditors.

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Administration

Administration is an insolvency process which is predominately designed to provide a breathing space from creditor action.

This ‘breathing space’ allows the appointed Licensed Insolvency Practitioner (“the Administrator”) to prepare financial restructuring plans with a view to rescuing the company as a going concern where possible. This may take the form of a sale to either a connected or an unrelated party.

If it cannot be reasonably saved, the Administrator will aim to achieve a better return for creditors than would be likely if the company were wound up (without first being in administration).

Company Voluntary Arrangement (IVA)

This is the corporate equivalent of an Individual Voluntary Arrangement (IVA). A CVA is a legally binding agreement and requires the supervision of a Licensed Insolvency Practitioner.

The CVA has many advantages over other corporate insolvency procedures because there is no directors' conduct report and the directors are free to continue managing the company. If successfully concluded, shareholders retain the business.

A CVA is usually only suitable where there is a good profitable business that, for example, has suffered a significant bad debt, employee theft or any event that has eroded the capital and requires restructuring.

Creditors' Voluntary Liquidation

This is the most common form of insolvent liquidation and is considered a terminal event.

Only a Licensed Insolvency Practitioner can be appointed as liquidator and the process is relatively straightforward to implement. The advantage over other insolvent liquidations is that it is quicker and easier to access and provides for director choice of the proposed liquidator. Directors in appropriate circumstances even receive redundancy payments from the Redundancy Payments Office.

Individual Voluntary Arrangement (IVA)

An IVA, or Individual Voluntary Arrangement to give it its full title, is a formal debt solution for people with a severe unsecured debt problem, who want or need to avoid being declared bankrupt by their creditors.

An IVA provides a formal structure to enable you to make repayments to your creditors based on affordability rather than at the previous contractual arrangements. You agree to pay your creditors as much as you can afford throughout the term of the IVA but no more, whilst, in turn, they agree to accept your payments rather than forcing you into bankruptcy and promise to legally 'write-off' any money still out standing at the end of your arrangement if you successfully reach the end of the IVA term.

It allows businesses to continue trading and can be flexible, allowing for variations should circumstances change.

Facing Bankruptcy

This is a formal procedure started by either the debtor (online) or a creditor (court based). The Official Receiver is initially appointed in most cases. All business and personal assets are realised for the benefit of creditors. The restrictions of this process can make continued trading difficult.

If you have debts, have been issued with a bankruptcy petition or have already been made bankrupt, come to see us on a no cost basis to explore the options.

In some cases, bankruptcy can be the right solution but its consequences are long lasting and can be severe, so it's important to be fully aware of the choices available to you.

Members' Voluntary Liquidation (MVL)

A Members’ Voluntary Liquidation (MVL) is a solvent liquidation where the directors declare that all debts and interest will be discharged within 12 months.

Despite being a solvent liquidation a Licensed Insolvency Practitioner is still required to act as liquidator. Directors and shareholders choose the liquidator with no input from creditors.

MVLs are often used as part of a tax planning strategy when entrepreneurs' relief may be available or as part of a restructuring under section 110 of the Insolvency Act.

Professional Advisors

If you have insolvent clients or a client whose finances you're concerned about, we recommend taking advice early on to provide a greater range of options and probably at a lower cost.

We also recommend professional advisors have at least one Insolvency Practitioner contact so you're ready to bring them in when you need to.

At Larking Gowen we offer a free initial consultation and would be happy to meet you and your team to outline options for specific cases or as part of a training event.

Directors' Advice

Company directors have significant responsibilities and these come into focus, sometimes in unexpected ways, when a company goes into liquidation.

If a director has breached their duties in some way, it's possible they could lose the protection provided by operating as a limited company and be liable for debts.

In some cases, transactions, such as the payment of dividends to directors, can be reversed, even those going back as far as five years.

Deceased Insolvents or Directors

Death is obviously distressing for family, friends and employees. We have experience of dealing with deceased individual insolvent estates and also with companies where the directors have died.

There are both formal and informal routes and we can meet with you on an initial no-cost basis to discuss options.

Relevant Insights

Blog

Warning signs of insolvency

Tuesday, 9 April 2024

Insolvency practitioner and partner, Lee Green, sets out ten warning signs of insolvency.

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Helping you get back on your feet

If you’re concerned that you or your business are in financial trouble, we can help you get back on your feet.

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Corporate insolvency

We explain some of the options available to you and highlight some case studies of businesses that were helped to get back on track.

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Personal insolvency

If you’ve been made bankrupt or are simply struggling to manage your current level of debt, we can help.

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Solvent liquidations and voluntary strike offs

When the decision has been made to wind up a dormant company and to distribute any remaining assets to the shareholders, there are two ways in which this can be done.