INSOLVENCY, WHAT YOU NEED TO KNOW
Tom Slator has acted as the appointed insolvency practitioner in many bankruptcies and Individual Voluntary Arrangements (IVAs) and therefore has the experience to be able to advise individuals who are facing the possibility of personal insolvency.
He is able to advise which formal procedure i.e. bankruptcy or IVA may be appropriate or whether it may be dealt with by some kind of informal agreement with the creditors. In most cases the individual will feel better by taking control of the situation and proposing a solution rather than waiting for a creditor to take action to enforce their debt by petitioning for bankruptcy (creditor’s petition) or some other legal action.
It will be necessary to consider whether the provisions of Sections 339 and 340 of the Insolvency Act 1986 may apply (Transactions at an undervalue and Preferences).
In many estates the main asset will be a property and the valuation of the equity taking into account, the claims of security holders and other owner/occupiers will be an important part of the initial evaluation.
If it is decided that bankruptcy on the debtor’s petition is the best way forward the firm is able to offer a service to assist the debtor (the person owing money) in preparation of the Statement of Affairs and filing at Court the Petition and Statement of Affairs (Forms 6.27 and 6.28). A fixed fee will be quoted in such cases.
Corporate Insolvency and Restructuring
Tom Slator is able to advise on all aspects of corporate insolvency and restructuring for SME companies. He as acted as the appointed liquidator in many Creditors Voluntary Liquidations (CVLs) Members Voluntary Liquidations (MVLs) and Compulsory Liquidations. He has also advised companies entering into Administration, Company Voluntary Arrangement (CVA) and using the simple process of Dissolution and Strike Off.
It is important to take independent advice when facing an insolvent situation.
Tom is able to provide such advice and if necessary advise on the appropriate formal procedure and an insolvency practitioner to be appointed.
Although an insolvency practitioner is also able to provide such advice after he or she is appointed as liquidator, they will be acting primarily for the creditors to maximise realisations, which may include legal action against the directors - for example an overdrawn loan account, illegal dividends, unauthorised remuneration, transactions at an undervalue or preferences, or Wrongful Trading under the Insolvency Act 1986
Tom is able to act solely for the directors and to advise on potential liability to the liquidator (as above) and whether the liquidator may make an adverse report under the Company Directors Disqualification Act 1986.
He can also advise on the preparation of the Statement of Affairs which the Directors will be required to submit to the appointed insolvency practitioner in any formal insolvency.
In any potentially insolvent situation it is important to take advice sooner rather than later. By contacting Tom Slator you ensure that full confidentiality is maintained while the directors consider all their options.
1. CVL with part sale of business, part management buy-out and repayment in full of the debenture held by the owner
The company acted as an electrical wholesaler. The owner had partly retired and lived abroad leaving the day to day management to the finance director. After the finance director left, the company started to make losses. The owner had previously secured his loan to the company by a debenture and wanted to ensure that the company could repay it before losses eroded the security.
The company was placed in CVL. Part of the business was sold to a key supplier who was able to continue with distribution of its products. The other part was sold to one of the employees with the business remaining in the same premises and most employees continuing in their jobs.
The debenture was found to be valid and the owner’s loan was repaid in full.
2. Management buyout of business followed by MVL of company
The owner wanted to retire and wanted to pass the business to the other director who was younger but had no shareholding. A sale of the business and assets was agreed to a new company, formed by the other director, which took on the name of the old company to keep the goodwill. The old company which also had substantial property was then placed in MVL.
3. Administration followed by ‘pre-pack’ purchase of the business
A company had been allowed to build up too much debt by the son of the original founder, but had a sound core business. The company was placed in administration and a new owner bought the business and assets without the debt. The new company, which employs around thirty people is trading and growing sales over ten years later.