Receivership v Liquidation
Receivership and liquidation are both formal insolvency processes for companies in distress. However, they are not the same and have differing purposes. Commonly, people are confused by the differences and this blog will explore what they are. Receivership Receivers are commonly appointed as a manager overall a company’s property. This includes physical assets (motor […]
Insolvency Practitioners’ Nightmare – “Divorce Wars”
Most creditors would, I suspect, be unaware of issues insolvency practitioners sometimes must deal with such as dissenting shareholders. Often the rift between erstwhile colleagues can turn as bitter as any acrimonious divorce. Intransigent positions are taken as the opposing shareholders won’t settle for less than they feel that they are entitled to. It seemingly […]
Transaction Undervalue
Set out in section 297 of the Companies Act 1993 (“the Act”); a transaction undervalue is a statutory power granted to a Liquidator to recover money where a party receives more value than they provided to the Company in liquidation. 1.1 – Criteria for a Transaction Undervalue Liquidators can only pursue transactions undervalue provided certain […]
Advantages of Liquidation
When a business is no longer able to trade due to financial challenges and the shareholders or directors want to close the business, often they will just let the company lapse and be struck off the register. However, voluntarily placing a company into liquidation can also be a cost-effective way to exit a business. Liquidation […]
Ask Not What Your Liquidator Can Do For You
To misquote JFK “Ask not what your liquidator can do for you, but what you can do for your liquidator”. Many company directors/shareholders who place a company in liquidation seemingly have a reluctance or unwillingness to further engage with the liquidator, tasked with winding up the affairs of their failed company, after the initial first […]
Ways to improve work life balance during lockdown
Working from home for the past six weeks has thrown up some specific challenges when it comes to maintaining a healthy work-life balance. Granted, being a mostly desk-bound profession in insolvency/law I have been lucky and able to work from home, not everyone was. But, a high workload, cramped desk space, always present computer/dreaded emails […]
How are recoveries allocated in a Liquidation?
When administering the liquidation of a company, it is common for the Liquidator to make a variety of recoveries including sale of fixed assets, collection of Company accounts receivable, and legal claims pursued by the Liquidator. When allocating the net proceeds of recoveries, the Liquidator must assess the nature of the Recovery and determine whether […]
Tips on cashflow management during lockdown
The Government has announced lockdown alert level 4 to prevent the widespread of COVID 19 in the community. It is very challenging for a business to shut down completely if is not an essential business, and thus it is important to know the impact it will have on the cash flow for your business and […]
Served with a Statutory Demand or a Liquidation application?
The other day I helped a fellow migrant. Hardly startling you will agree, but the context was in a Court liquidation where I was the liquidator, and the fellow migrant was the director of the company that was liquidated. Furthermore, we were from completely different cultures and backgrounds. The decided advantage that I had was […]
How to use sections 12, 14 and 34 of the Receiverships Act 1993?
Section 14 of the Receiverships Act 1993 (the Receiverships Act) gives the receiver of a company the power to request and inspect the books, records and documents (the records) of the company from its directors. This power is very similar to that, which is given to a liquidator, by section 261 of the Companies Act […]
