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Kidderminster law firm in Harriers promotion push partnership Law firm mfg Solicitors has...
Our team of experts are available to assist you in all aspects of insolvency whether you are a creditor, company debtor or a director seeking advice in respect of your duties.
What is insolvency?
Insolvency is where a company becomes unable to pay its debts when they fall due. As a result, the company may initiate a voluntary liquidation or be forcibly wound up by its creditors. Upon liquidation of the company, an Insolvency Practitioner will be appointed to take control of the company with a view to selling its assets and paying off the creditors.
How can you determine whether a company is insolvent?
The test is whether a company is deemed unable to pay its debts. This can be established by the following: -
- Failure to comply with a statutory demand.
- Failure to satisfy enforcement of a judgment debt.
- The court being satisfied that the company is unable to pay its debts as they fall due (the "cash flow" test).
- The court being satisfied that the liabilities of the company exceed the assets of the company (the "balance sheet" test).
Often, the easiest way to determine insolvency is by serving the company with a statutory demand.
How can mfg help creditors?
As a creditor we can assist you with the following: -
- Assessing whether a debtor company is insolvent by carrying out various searches;
- Establishing whether the debtor company is already in the process of being liquidated;
- Serving a statutory demand on the debtor to demand the debt and evidence insolvency, thereby initiating the process;
- Preparing and serving the debtor company with winding up proceedings;
- Liaising with insolvency practitioners following the winding up of the debtor company to request that they investigate any suspicious behaviour and to maximise prospects of recovery.
How can mfg help debtor companies?
As a debtor company, we can advise you in respect of: -
- Ways in which you can avoid being wound up;
- How to respond to a statutory demand;
- How to defend winding up proceedings;
- Negotiating settlement and/or payment plans;
How can mfg help directors?
As a director you may be concerned about your personal liability in an insolvency event, we offer advice on the following: -
- What you should do and should not do if the company is insolvent;
- What your duties are to the company and its creditors;
- What the grounds are for investigating the directors post-insolvency;
- Whether there is any scope for personal liability;
When is the best time to seek advice for an insolvency related issue?
Insolvency is a time sensitive issue with strict deadlines which you must comply with. It is advised that you seek legal advice straightaway in order to stand the best chance of protecting your position. Our Insolvency Team can be contacted on 01562 820181 if you wish to discuss any insolvency matters or concerns.
Articles
Samuel Pedley
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“Insolvency Statistics for the April to June 2020 quarter: period of tranquillity before chaos?”
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“The end of insolvency restrictions is in sight”
"End of Coronavirus Restrictions on Insolvency Procedures"
Cases to Note
- Acting for a Trustee in Bankruptcy and a liquidator against a former director / group company in commencing a preference, transaction at an undervalue and transaction to defraud creditors. Group Company inter trading and claim to shareholding of holding company. Significant because defendant’s / Directors family home involved and claimant client needed to take the action for the benefit of creditors. Estimated to realise significant sum for creditors. Involved taking possession of property to realise interest.
- Also involved a dispute over shareholding of parent company, competing claims to shareholding of company where major assets was a large property of student accommodation valued at £7.5m. Difficult and involved legal arguments as to ownership.
- Case involved the restoration of the company to commence the claim to the shareholding. Settlement heads of terms drafted but now moving to advise in relation to parent company being placed into a Members Voluntary Liquidation in order to distribute funds.
- Acting for SME Company in application to distrain a winding up petition for substantial debt that was disputed. Successfully dismissed petition on application concerning intricate allegations of breach of duty, negligence and breach of contract. Detailed and involved contractual terms to interpret and enforce. Case involved difficult and aggressive petitioner.
- Acting for a Director against a Liquidator / Administrator in relation to claims against former director for alleged preference transactions, suspicious actions / omissions of a director, alleged transactions at an undervalue and transaction to defraud creditors. Lengthily involved pre-action correspondence. Involved and intricate interpretation of difficult area of insolvency law.