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Company Debt Solutions Available

  1. Closure

Company Debt Solutions Available – Creditors Voluntary Liquidation (CVL)

Directors may consider a CVL when the:

  • The company cannot meet its liabilities;
  • Initiated by Directors & Shareholders;
  • Immediate stress relief as the liquidator assists from day one;
  • Low Cost Fixed Fees;
  • Options for Employees;
  • Legal Action halted;
  • Debts written off.
Directors initiate a CVL and involve the shareholders in placing the company into Liquidation. The liquidator can act quickly in this procedure and take control of the situation for the company.
We handle the CVL process, and all creditors will therefore liaise with us, thereby reducing stress from creditor pressure.
Directors initiate a CVL along withshareholders of the company, a certain degree of control remains. This can prevent the company from entering Compulsory Winding Up if a creditor issues a Winding up Petition.
CV, however, possess many advantages{
  • Employees can claim:
    • unpaid wages,
    • holiday pay,
    • redundancy,
    • loss of notice.Through the Government Scheme.
    • The option to purchase back assets of the company; and
    • the opportunity for directors and shareholders to continue with new business ventures without debt.

Company Debt Solutions Available – Compulsory Liquidation 

  • Court Procedure;
  • Minimal control of directors;
  • It can be much more expensive than CVL.

A High Court usually orders a Compulsory Liquidation on a creditor’s petition, but it can also occur on behalf of the company or shareholder. An Official Receiver immediately takes control of your company. The OR is a government body, not an independent Insolvency Practitioner. 

A Compulsory Liquidation follows the procedure of issuing a Winding Up Petition. Undoubtedly, the company will have been under significant financial pressure for some time. Issuing a Winding Up Petition is a creditor’s most serious action. 

So. if your company is receiving significant pressure from creditors, particularly statutory demands or threats of Winding Up, you must act quickly. Should a Petition occur, the options available to the company reduce. 

We can help if your company received a Statutory Demand or Winding Up Petition, but you must take action quickly to avoid Compulsory Liquidation. The directors have no control over the appointment of the liquidator. Compulsory Liquidation is the most invasive formal insolvency proceeding. 

If the company is viable, we can look at securing a CVA or Administration. Please see the Rescue options above for more information on CVA or ADM. 

Company Debt Solutions Available – Company Dissolution 

  • Avoids formal insolvency procedures;
  • Strict criteria[
  • Risk of restoration for up to 20 years.

You may dissolve a company from the register by voluntary dissolution, but specific strict criteria must exist. Should the company have liabilities at the date of proposed dissolution, then you that a creditor of the company, may request the company be restored to the register for as much as 20 years from dissolution in some cases. 

To dissolve the company, strict guidelines exist on trading periods, notices given to certain parties of the intention to strike off etc. 

Alternatively, if you wish to restore a company to the register, the process can seem daunting, and we can assist you. 

So, if you want to discuss company dissolution or restoration, we can help. Please call a team member on 0330 056 3120 or email confidential@hbgadvisory.co.uk; one of our experienced team will be happy to help.

  1. 2.Rescue 

Administration (ADM) 

  • Procedure to rescue the business as a going concern, if possible
  • Fast appointment of Administrators achievable
  • Protection from creditor legal action
  • Saving employee jobs, reducing preferential creditors
  • Buy back option of the business and assets
  • Administration debts are written off
ADM is a formal insolvency procedure, however, the principle aim of ADM is to rescue the Company as a going concern, if possible. A licenced Insolvency Practitioner is to be appointed, and Smith & Barnes are able to appoint one of their licenced Insolvency Practitioners.
There are numerous advantages to ADM, should it be believed that one of the statutory purposes can be achieved.
There are various routes into ADM however if a Winding Up Petition has been issued by a creditor then Directors are not able to make the appointment of an Administrator. This does not necessarily mean that an ADM is not possible via other means, however, if your Company is facing creditor pressure and ADM is viable then quick action is needed to ensure that this is an option available to the directors.
A form of ADM can also be known as a Pre-Pack Administration, which ultimately means that a sale of the business and assets is negotiated prior to the Company entering into ADM. The benefits of this can include the continuation of business and avoiding redundancy of staff. A sale of the business is effective immediately upon entering ADM. This results in the smooth continuation of the business immediately upon ADM. The current directors, or management, can purchase the business and assets should their offer be in line with market value and the offer is the best put forward to the Administrators. The sale consideration is retained by the Administrator and the funds are utilised and paid in line with Insolvency Legislation.
If would like to discuss ADM further then please call one of our team on 0113 5323278 or email confidential@affordableliquidators.co.uk and we will be pleased to assist.

Company Voluntary Arrangement (CVA) 

A CVA is a formal agreement between the Company and its creditors. The agreement is bespoke to the Company and can be made up of a variance of factors that are put forward by the Company.
Creditors have to be in agreement to the proposals put forward and vote on the terms of the arrangement accordingly. Should 75% of those creditors voting be in agreement, then the arrangement is implemented accordingly. It should be noted that at lease 50% of the shareholders also need to be in agreement to this process.
The Company liabilities at the date of the approval of the CVA are ring fenced and those creditors, and the Company are bound by its terms.
A CVA allows the Company to continue to trade with contributions being paid to the CVA Supervisor in line with the agreed proposals usually via on going trading profits. It may also be agreed that the Settlement terms are by means of a one of full and final payment that is made into the arrangement within a certain period of time.
A CVA is flexible and specific to the Company and creditors involved. The Supervisor, who must be a licenced Insolvency Practitioner and agree to act, will ensure that the terms of the CVA are adhered to by all parties until successful completion is achieved.

 

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