Insolvency, Corporate Recovery & Business Turnaround

Business tenancies - are you at risk?

As Brexit rumbles on, the UK’s financial position remains in the spotlight. In particular, the commercial property sector faces its own challenges and for both commercial landlords and tenants alike, the continued uncertainty will no doubt cause some...

Corporate insolvencies

A recent report by the Insolvency Service has shown that corporate insolvencies have risen to their highest level since 2014, with a staggering 16,090 companies entering insolvency during 2018. Even the largest of household names such as Patisserie Valerie,...

The signs and procedures guide for landlords

With 16,502 companies becoming insolvent in 2016, it comes as no surprise that landlords want clarification on how to protect themselves, their property and what to do if their tenant becomes insolvent. What do I look out for if I have suspicions my tenant...

To trade or not to trade...

When a company is presented with a winding up petition it is not uncommon for the business to continue trading whilst the directors try to resolve the issue with the creditors concerned.  However, directors need to be aware of the implications of the...

The rule on penalty clauses considered in the High Court

In a previous blog , I discussed the change to the rule on penalty clauses resulting from the Supreme Court’s decision in Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd v Beavis [2015] UKSC 67. In that case, it was established that...

Directors' disqualifications

The law is strict on misconduct relating to directors. Kevin Sullivan explains recent changes to legislation and how directors need to be clear on the circumstances that might lead to an allegation of misconduct should their company fail. What is...

Will victory for 'leave' prove a defeat for freedom of choice?

I often speak to people who wish to claim on a legal expenses insurance policy to assist with the cost of instructing a solicitor, but who are being told by their insurer that they must use the insurer’s preferred ‘panel’ solicitor. As...

1, 2... Strike off

In October 2015, striking off periods were reduced under the Small Business, Enterprise and Employment Act 2015.  If there are no objections, then a company can be struck off no less than 2 months (previously 3 months) from the publication of the...

Payment through adjudication...not insolvency

Changes to the Housing Grants Construction and Regeneration Act were thought to make winding-up proceedings possible when a party failed to pay an interim certificate.  But that thinking appears to be flawed! The amount certified in an interim...

HMRC crackdown - directors be aware

Tax avoidance is a highly topical and political issue at the moment.  It seems to feature in the news on a near daily basis, particularly as we move closer towards May’s general election. The latest high-profile drive by the Government and HMRC...

Forced out of business?

In October 2014, Mr C, a distressed director, sought advice from Birkett Long LLP in relation to his duties and the future of his company.  The scenario he painted was not a happy one - a large national competitor, which had deep pockets and was willing...

HMRC cracking down on tax avoidance/tax migration schemes

The Finance Act 2014, which became law in July, is threatening some companies with insolvency. The Act creates new powers which are designed to target individuals and companies which have taken advantage of tax avoidance/tax mitigation schemes. HMRC...

Wrongful trading

Poor cash flow may be a sign of a struggling business and in those circumstances directors need to proceed cautiously otherwise they could potentially find themselves in all sorts of trouble. Directors of limited companies are not always aware that...

"Wrongful trading" warning for company directors

Directors of limited companies are being warned that their personal assets could still be at risk if their business folds leaving a stream of creditors. Kevin Sullivan, solicitor and partner at the Essex law firm Birkett Long, says if it can be proven a...

Insolvencies fell in the last quarter of 2012: is this good news?

The Insolvency Service published their analysis of the rate of insolvencies for the fourth quarter of 2012 on 1 February 2013.  The results showed that there was a decrease in the rate of insolvencies by: 3.3% compared to the third quarter of 2012;...

Try not to get too wound-up

  A winding-up petition was brought by British Gas against Angel Group Ltd for substantial unpaid bills.  British Gas claimed it was owed over £600,000 from energy supplied to 2,000 properties Angel Group managed for housing asylum...

Distressed companies - a stitch in time

It never ceases to amaze us how late some people leave it before seeking professional advice, particularly directors served with a winding-up petition. To a degree, it’s easy to understand the reluctance to incur costs initially.  The directors...

Zombie Companies

The Q2 insolvency statistics in England and Wales were released on 3 August and show a slight decrease in the number of companies going into compulsory or creditors’ voluntary liquidations.  Compulsory liquidations have been steadily dropping...

Dawn in the red: zombie companies

Insolvency body R3 claims that 8% of UK businesses can only afford to pay the interest on their debt, rather than actually pay down their principal debt, and 30% of companies are regularly reliant on their maximum overdraft facility.  Such businesses...

Decline in insolvencies

Statistics released by the Insolvency Service for Q2 2012 show a 3.6% decrease on the previous quarter with 4,115 compulsory liquidations and creditors’ voluntary liquidations (CVLs).  The decrease was entirely in compulsory liquidations with...

Show me the money!

Have you ever had a cheque bounced on you or a bank payment stopped?  If you have you will know how annoying and time wasting this is. It is trite law that a cheque is equivalent to cash! The leading case on bounced cheques and stopped bank payments...

When the going gets tough, the tough get restructuring

Tougher economic environments often see a greater amount of restructuring within businesses, including a demerger. There are a number of reasons why a company may want to demerge: - to unlock shareholder value (sometimes enabling an exit by one party); - to...

Insolvency Reforms

Shortly before Christmas 2011, the Insolvency Service published some proposals to reform bankruptcy and company winding-up processes – essentially to simplify those processes, particularly in the case of non-contested petitions. The proposals include:...

Your business property. It does not have to cost the earth

David Rayner, partner from Birkett Long’s Commercial Property Team discusses the “big themes” that are likely to affect commercial premises during 2012. From the perspective of both landlords/investors on the one hand and tenants/occupiers...

Caught for fraudulent trading

Liquidators seeking to bring a claim under s.213 Insolvency Act 1986 (fraudulent trading) must be able to demonstrate that the relevant persons involved showed actual dishonesty. A recent case heard in the Chancery Division saw a company secretary and the...

Personal liability for directors

Company directors face many rules and regulations during their day to day working life, and most certainly at a time of their company going into administration or liquidation. The recent case of Oxford Pharmaceuticals Ltd (2010) involved a company that had...

What are pre-pack administrations

There has been a great deal of recent press about ‘pre-packs’. This article looks at what they are and why they have been in the press. The Enterprise Act 2002 enables a company or its directors to appoint an administrator without having any...

The balance sheet test

When is a company insolvent? The Insolvency Act 1986 sets out a number of tests including the following: “A company is deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company’s assets is...

Directors Disqualification Proceedings

Recent statistics from the Insolvency Service show that there were 3,974 compulsory liquidations and creditors’ voluntary liquidations in England and Wales in the third quarter of 2010 (seasonally adjusted). This represents a fall of 2.2% on the...

Cash is King

According to The Insolvency Service “more than half of Britain’s small businesses collapse because of cash-flow problems.” Good cash-flow is the lifeblood of all businesses. Our debt recovery team offers a fast effective debt collection...

Insolvency

You have dealt with ‘Failing Company Ltd’ for years but recently it has been struggling and, at close of play one Friday, it owes you several thousand pounds. The following Monday you receive a letter from IP Insolvency Practitioners, explaining...

Safeguarding your family property when things go wrong

It is a sad but true fact that bankruptcy has become particularly topical. Here, we examine its potential impact upon family properties. When debts are greater than an individual’s assets or debts cannot be paid as they fall due, creditors may...

Civil Recovery Claims by a Liquidator/Administrator

In the last edition of For Business we examined directors’ disqualification proceedings against the backdrop of querying whether being a director of a limited company really protected you from incurring personal liability. In this article we look at...

Insolvency - How limited is your liability?

Author: Kevin Sullivan Directors’ Disqualification Proceedings Does being a director of a limited company really protect you from personal liability? Well, the answer, somewhat unhelpfully, is yes and no – it depends. Whether, and to what...

"Cash-strapped" Brits the most insolvent for 50 years

Figures from The Insolvency Service have revealed a 28% rise in the number of people declaring themselves insolvent in the past few months. There were 35,242 individual insolvencies in England and Wales, including more than 4,000 of the new Debt Relief...

"UK companies in the eye of the storm", warn specialists

Britain is in danger of a ‘deluge’ of businesses going under through insolvency in the next year, an expert report has warned. A national business rescue and restructuring firm has warned that Britain is in the “eye of the storm” amid a...

How Limited is Your Liability? Directors Disqualification Proceedings

Does being a director of a limited company really offer you no personal liability? Well, the answer, somewhat unhelpfully, is yes and no – it depends. Whether, and to what extent, you may be personally exposed is a matter that is largely within your...

Writing on the wall for debt-ridden Borders

National bookshop Borders is expected to appoint new administrators over the coming days as publishers and customers abandon its stores. Borders, which has 45 stores nationwide, has suffered from falling sales over recent years as the advent of internet...

Europeans seeking 'easy bankruptcy' flock to the UK

Hundreds of business owners are coming to the UK from the continent to take advantage of lenient insolvency laws and declare themselves bankrupt. German, French, Austrian and Irish owners have set sail to take advantage of the UK’s swifter route to...