The looming insolvency crisis

A record number of corporate insolvencies in the first quarter of 2022 suggest the corporate sector faces a crisis

Back in May, we warned that a wave of company failures would hit UK firms in the latter half of 2022. Just three months later, it appears the situation may be even grimmer than predicted. This week, reports revealed that corporate insolvencies were up more than 80% in the past quarter compared to 2021. This…

Read More

Company insolvencies rapidly increasing

A surge in company liquidations in England and Wales since the Covid-19 pandemic

Government figures reveal a 40% increase in the number of registered companies that entered insolvency procedures during the past year. Newly-released data shows the number of companies entering statutory insolvency procedures has risen 15% compared to pre-pandemic levels in June 2019. Furthermore, the number of companies that were placed into a creditors’ voluntary liquidation (CVL)…

Read More

Dark Side of Liquidation

Support for unsecured creditors in liquidations is scarce

When a limited company enters liquidation, for whatever reason, revenue from the sale of the company’s assets is redistributed amongst creditors and shareholders in order of priority.   The director’s powers cease and an insolvency practitioner (IP) takes over managing the company’s affairs. The director no longer has any control over the company or its…

Read More

Liquidation advice for creditors in a CVL

Creditors in a creditors' voluntary liquidation (CVL) gain leverage by uniting. But they must be proactive

In a creditors’ voluntary liquidation (CVL), the liquidator / insolvency practitioner (IP) turns the insolvent company’s assets into cash, and pays their own expenses before distributing revenue to creditors. As in all statutory insolvency procedures, secured creditors receive payment before preferential creditors. Any revenue that remains after preferential creditors have been paid is distributed equally…

Read More

Business rescue advice: administration vs CVL

administrations are usually longer and more expensive than CVLs

When directors resolve not to rescue an insolvent company, an insolvency practitioner (IP) may recommend placing the company into administration. However, in many instances a creditors’ voluntary liquidation (CVL) would be a more suitable insolvency procedure. Whereas companies remain in administration for at least 12 months, CVLs usually take less time and therefore incur fewer…

Read More

Tips for creditors in administration

Creditors must move swiftly and request ameeting of creditors

Many business owners and directors will return after lockdown to discover they’ve become creditors in a statutory insolvency procedure, most likely administration. This is because administration is an attractive solution for business owners looking to avoid incurring further debts with suppliers following Covid-19. The procedure is a rescue mechanism for asset-rich but insolvent companies and…

Read More
Scroll To Top