Insolvency, Company Administration and Liquidation

Pre-pack Company and Wrongful trading claims are where we can really help Directors limit thier liabilites.

Hewetts have for many years undertaken a broad spectrum of insolvency related work on behalf of companies, individuals and insolvency practitioners. We act for directors of companies in relation to insolvency issues and company administration matters, as well as for individuals in arranging Voluntary Arrangements and bankruptcy issues. Do you need help with putting your company into liquidation or administration, or advice as to the general solvency of your company or business? With the economic challenges we currently face there are plenty of ways under the current legislation where we can help advise you as to the best route to take.

Hewetts can assist directors with:

• Administrative Receivership
• Receivership
• Moratoriums
• Corporate Voluntary Arrangements
• Liquidators

Hewetts also have considerable experience in acting for insolvency practitioners in:

• Asset disposal Agreements
• Transfer of property
• Enforcement of VAs
• Applications for Annulment
• Wrongful trading investigations
• Phoenix Company issues
• Directors liabilities

Pre-Pack ‘Phoenix Companies’

It might be possible to proceed with a company administration by way of pre-pack.  Pre-Packs were introduced under the Enterprise Act to enable companies, in certain circumstances, to sell their assets to a new company often, owned by the same directors and shareholders, with the transaction taking place in a very short period of time. Whereas under the old law this was generally considered to be unlawful, since the Enterprise Act it is considered lawful if signed off by the administrator. We can help advise whether a pre-pack is relevant and appropriate for your particular company.

If a pre-pack is not best-suited for you, there are other forms of process that might be appropriate, such as voluntary administration, voluntary liquidation, compulsory liquidation or transfer of appropriate assets.

Wrongful and Unlawful Trading

As a director you need to be aware that if your company goes into liquidation, or is wound up, then liquidators and administrators have the power to look back through past Company transactions, and to hold directors personally liable for the actions of that Company. In other words the directors incur a personal liability, and the consequence of wrongful trading is to enable the administrator or liquidator to recover directly from the directors’ funds to repay to the company. Once an administrator is appointed, even for the purposes of a pre-pack, he will be duty bound to consider whether the directors have engaged in wrongful trading.

Under the Insolvency Act wrongful trading has a definition that can be widely interpreted. If the directors have been running the company in circumstances where the company has been unable to pay its debts as they fall due, then a liability might arise. We have considerable experience in dealing with wrongful trading issues and would be able to advise on:

- the likelihood of an action arising in the circumstances;
- the best course of action to take; and
- how to mitigate your position.

Administration or Liquidation

In relation to an administration or liquidation, directors will also have to give consideration to personal liability for unpaid National Insurance. Whilst there may be some protection over outstanding PAYE corporation tax payments, there may very well be a personal liability for National Insurance.We will also be able to assist you on the appropriate form of agreement to give effect to the transfer of assets. This will be required by an administrator, or indeed a liquidator, following the sale of those assets.

Bankruptcy

Hewetts also act for individuals in arranging Voluntary Arrangements and Bankruptcy issues. We can help you appoint Supervisors for individual voluntary arrangements and help you liase with them with regard their progress. Please see the ‘Bankruptcy’ page for more information.

We offer free initial advice, regardless of whether or not you later wish to instruct us to act for you.

For advice and assistance contact Geoff Kew in our Company & Partnership Department on Direct Line: 0118 9559604.