Insolvency Services and Business Recovery Advice

Larking Gowen's insolvency & recovery department is led by our two Licensed Insolvency Practitioners and supported by a team of insolvency & business recovery specialists.

Receive friendly, impartial advice backed by over 200 years of combined insolvency experience. We’re here to guide and support you through what is likely to be a difficult and confusing situation.

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Creditors' Voluntary Liquidation

This is the most common form of insolvent liquidation and is considered a terminal event.

Only a Licensed Insolvency Practitioner can be appointed as liquidator and the process is relatively straightforward to implement. The advantage over other insolvent liquidations is that it is quicker and easier to access and it allows the directors to choose the proposed liquidator.

One of the Liquidators main roles is to dispose of the Company’s assets, which can be acquired by the directors under appropriate circumstances.

Employees, which could include directors, can claim monies owed from the Redundancy Payments Office.

Members' Voluntary Liquidation (MVL)

A Members’ Voluntary Liquidation (MVL) is a solvent liquidation where the directors declare that all debts and interest will be discharged within 12 months.

Despite being a solvent liquidation a Licensed Insolvency Practitioner is still required to act as liquidator. Directors and shareholders choose the liquidator with no input from creditors.

MVLs are often used for their favourable tax treatment on the distributions declared to shareholders. Business asset disposal relief (formerly entrepreneurs’ relief) may also be available, to reduce tax further.

Administration / Pre-Pack

Administration is an insolvency process which can provide breathing space from creditor action.

This ‘breathing space’ allows the appointed Licensed Insolvency Practitioner (“the Administrator”) to prepare financial restructuring plans with a view to rescuing the company as a going concern where possible. This might be by way of a CVA for example.

If the company cannot be saved, the Administrator will aim to achieve a better return for creditors than would be likely if the company were wound up. This may take the form of a sale to either a connected or an unrelated party.

In certain circumstances, such a sale could be agreed upon prior to the Administration and completed immediately upon the Administrator’s appointment. This is known as a “Pre-pack”.

Company Voluntary Arrangement (CVA)

This is the corporate equivalent of an Individual Voluntary Arrangement (IVA). A CVA is a legally binding agreement and requires the supervision of a Licensed Insolvency Practitioner.

The CVA has many advantages over other corporate insolvency procedures because there is no directors' conduct report and the directors are free to continue managing the company. If successfully concluded, shareholders retain the business.

A CVA is usually only suitable where there is a good profitable business that, for example, has suffered a significant bad debt, employee theft or any event that has eroded the capital and requires restructuring.

Directors' Advice

Company directors have significant responsibilities and these come into focus, sometimes in unexpected ways, when a company enters an insolvency process.

If a director has breached their duties in some way, it is possible they could lose the protection provided by operating as a limited company and be liable for debts.

In some cases, transactions, such as the payment of dividends to directors, can be reversed, even those going back as far as five years.

Individual Voluntary Arrangement (IVA)

An IVA, or Individual Voluntary Arrangement to give it its full title, is a formal debt solution for people with a severe unsecured debt problem, who want or need to avoid being declared bankrupt by their creditors.

An IVA provides a formal structure to enable you to make repayments to your creditors based on affordability rather than at the previous contractual arrangements. You agree to pay your creditors as much as you can afford throughout the term of the IVA but no more, whilst, in turn, they agree to accept your payments rather than forcing you into bankruptcy and promise to legally 'write-off' any money still out standing at the end of your arrangement if you successfully reach the end of the IVA term.

It allows businesses to continue trading and can be flexible, allowing for variations should circumstances change.

Facing Bankruptcy

This is a formal procedure started by either the debtor (online) or a creditor (court based). The Official Receiver is initially appointed as Trustee. All business and personal assets are realised for the benefit of creditors. The restrictions of this process can make continued trading difficult.

If you have debts, have been issued with a bankruptcy petition or have already been made bankrupt, come to see us on a no cost basis to explore the options. It may still be possible to propose an IVA to avoid or exit Bankruptcy.

In some cases, bankruptcy can be the right solution but its consequences are long lasting and can be severe, so it's important to be fully aware of the choices available to you.

Deceased Insolvents or Directors

Death is obviously distressing for family, friends and employees. We have experience of dealing with deceased individual insolvent estates and also with companies where the directors have died.

There are both formal and informal routes and we can meet with you on an initial no-cost basis to discuss options.

Professional Advisors

If you have insolvent clients or clients whose finances you're concerned about, we recommend seeking advice early. Early intervention can provide a greater range of options and likely at a lower cost.

We also suggest that professional advisors maintain contact with at least one Insolvency Practitioner, so you're able to involve them quickly when necessary.

At Larking Gowen, we offer a free initial consultation and would be happy to meet with you and your team to outline options for specific cases or as part of a training event.

Relevant Insights

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Insolvency practitioner and partner, Lee Green, sets out ten warning signs of insolvency.

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If you’ve been made bankrupt or are simply struggling to manage your current level of debt, we can help.

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Solvent liquidations and voluntary strike offs

When the decision has been made to wind up a dormant company and to distribute any remaining assets to the shareholders, there are two ways in which this can be done.