Insolvency

A company is deemed insolvent when it is unable to pay its debts as they fall due or has liabilities, which exceed its assets. There are various options available to a company prior to it being insolvent. Once a company is deemed insolvent, the most common action is to liquidate the company.  Usually, this happens through a creditor's application to wind up the company.  We act for both creditors and debtor companies in winding up applications.  When dealing with a debtor company, we advise both the company and the directors on the ramifications of insolvency. 

If you are facing pressure from creditors or are uncertain about the financial future of your business, it is important that you understand your duties.  As a director, your obligations change when you know or ought to have known that there is no reasonable prospect that the company will avoid insolvent liquidation.  It is paramount that as the person responsible for the operation of your business you know the company's full financial information and act accordingly.  If you have concerns about the financial status of your business, obtaining early advice, understanding your obligations and devising a strategy is critical and may help mitigate or prevent issues from materialising. 

How can we help you?

• Debt recovery
• Advice on your legal options and obligations if you think your company may be insolvent, with a particular focus on both company and director duties.
• Advising on how to deal with pressure from creditors and how to respond to demands for payment.
• Issue and defend claims relating to a director’s personal liability.
• Draft and serve statutory demands for payment on behalf of creditors.
• Respond to statutory demands for payment including issuing injunctive proceedings against the alleged creditor.
• Issue and represent creditors in winding up proceedings.
• Advise and represent debtor companies in winding up proceedings.
• Negotiations with the other party.
• Company closure advice.
• Advising on claims by liquidators, for example, preferential claims or claims at an undervalue.
• Bringing bankruptcy claims against individuals
• Director and shareholder disputes

As a full-service law firm, we work closely with our colleagues in other departments and particularly draw on the experience of our colleagues in the Company Commercial and Employment teams.  Our clients may also benefit from advice from Nockolds Wealth.