Administration is a useful procedure for companies which appear to be viable (at least in part) as a going concern.

It is used as a rescue tool for insolvent businesses, allowing continued trading with a view to the sale of the business and/or its assets as well as potentially saving jobs.

Entering into administration can be done very quickly. The appointment of an administrator can be made by the Court, a qualifying floating chargeholder, the directors, the company or by one or more creditors.

The administration procedure usually lasts for a maximum of 12 months and is followed by an exit strategy (usually liquidation, dissolution or a voluntary arrangement).

A company may enter into administration with the aim of:

1. rescuing the company as a going concern; or
2. achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration); or
3. realising property in order to make a distribution to one or more secured or preferential creditors.

A company in administration is automatically protected from creditors commencing or continuing legal action against it, known as a moratorium.

A ‘pre-pack’ administration is where a purchaser is found for the business and/or its assets prior to the administration an effected immediately upon, or shortly after, the appointment of an administrator.

Valentine & Co will advise you on the administration procedure and the effects on the company, its creditors and the directors.

Call us now on 020 3959 9595 to discuss your options.

The CVL procedure is the most popular mechanism for closing down and winding-up a company that is insolvent and is unable to meet its liabilities as and when they fall due. The procedure is used where a rescue in not viable.

A CVL is initiated by the director(s) of a company who, with shareholders, nominate an Insolvency Practitioner to wind up the insolvent company. Creditors formally make the appointment at a meeting of creditors, usually held within 2-4 weeks of seeking advice.

Valentine & Co will assist you in the preparation of the company’s statement of affairs (effectively a balance sheet), together with a report to creditors outlining the company’s position.

The liquidator must be a licensed Insolvency Practitioner who will dispose of all company assets and share the proceeds with creditors in accordance with their adjudicated claims and priorities.

The liquidator will also report on the conduct of the directors in relation to the demise of the company. Directors must be mindful at all times that if their company is struggling, they should not continue to trade whilst knowingly insolvent, unless they are very confident that the company’s fortunes will change.

Valentine & Co will advise you of all your options, your responsibilities and the consequences of the CVL procedure.

Call us now on 020 3959 9595 to discuss your options.

An MVL takes place when the director(s) swear a statutory declaration stating that the company has sufficient assets to be able to pay all of its creditors in full (together with all costs and statutory interest) within 12 months.

This usually takes place when the director(s) of a company believe that the company is solvent and no longer wishes for the company to trade.

The statutory declaration will state that the directors have made a full inquiry into the company’s affairs. The declaration will include a statement of the company’s assets and liabilities as at the latest practicable date before making the declaration.

Call us now on 020 3959 9595 to discuss your options.

A CVA is a legally binding agreement between a company and its creditors. It is often in the best interests of an insolvent company’s creditors and can allow the company to continue trading under the control of its directors and avoid redundancies.

The company proposes an agreement with its creditors detailing how its debt is to be repaid. The CVA proposal will be based on the level of debt the company can reasonably afford to pay over a given period and may provide for partial or full repayment.

The CVA requires the approval of at least 75%, in value, of the voting creditors. If approved, the CVA will bind all creditors who were entitled to vote.

Valentine & Co are experienced in providing you with practical advice on proposing a viable CVA and dealing with issues such as ongoing funding and future profitability.

Valentine & Co will assist you in the preparation of all documents and deal with your creditors directly.

Call us now on 020 3959 9595 to discuss your options.

A company enters into compulsory liquidation following a Court order for the company to be wound up (a ‘winding-up order’). This follows a petition of an appropriate person, usually a creditor of the company who is owed more than £750.

An Official Receiver is appointed liquidator of the Company and may decide to pass the case over to an Insolvency Practitioner, usually where there are assets to realise.

If you are facing a petition for winding-up, or the threat of one, Valentine & Co can advise you on the best course of action. Other options are available to avoid a winding-up order being made.

Call us now on 020 3959 9595 to discuss your options.

An IVA is a legally binding agreement between an individual and their creditors. It is often in the best interests of the creditors and can allow an individual to continue in their profession and remain as a director of a company.

The individual proposes an agreement with their creditors, detailing how their debt is to be repaid. The IVA proposal will be based on the level of debt the individual can reasonably afford to pay over a given period and may provide for partial or full repayment.

The IVA requires the approval of at least 75%, in value, of the voting creditors. If approved, the IVA will bind all creditors who were entitled to vote.

Valentine & Co are experienced in providing you with practical advice on proposing a viable IVA, which usually involves a monthly contribution over a given period, typically 5 years.

Valentine & Co will assist you in the preparation of all documents and deal with your creditors directly.

Call us now on 020 3959 9595 to discuss your options.

Bankruptcy is one way of dealing with debts you cannot pay and should only be considered as a last resort. The bankruptcy proceeding discharges you from most debts, allowing you to make a fresh start.

Your estate (comprising of your assets) will be vest in a trustee who has a duty to realise any interest you have and distribute the proceeds among your creditors. You will be allowed to keep essentials for living and tools of your trade.

If there is equity in your property, then this is likely to also be realised. Your bank accounts will be frozen and your credit cards stopped. There are a number of restrictions and obligations whilst you are an undischarged bankrupt, including, being unable to practice certain professions, act as a company director and taking further credit.

Any individual can go bankrupt, including individual members of a partnership. You may petition for your own bankruptcy or one of your creditors, owed more than £5,000, can petition to the Court.

Valentine & Co can provide you with expert advice and practical guidance.

Call us now on 020 3959 9595 to discuss your options.