Turnaround, Restructure and Refinance

Parts of a company's business may be unprofitable and insolvency may be avoided by shedding such parts. We are able to provide a comprehensive business review, which will highlight such issues and make detailed recommendations for the way forward. In this respect we will work with the company's management, financiers and other stakeholders if it is possible to formulate a solution to return the company to profitability.

Administration

A company may be placed into administration out of court by:

1. debenture holders with qualifying and enforceable floating charges
2. the company or its directors

and by order of the court upon the petition of:

1. any creditor
2. the company's liquidator
3. a supervisor of a company voluntary arrangement
4. the company, its shareholders or its directors

The statutory purposes for the appointment of an administrator must correspond to a hierarchy of three objectives:

1. rescuing the company as a going concern (not simply its business). If this is impossible:
2. achieving a better result for the company's creditors then would be likely if the company were wound up. If this is not possible:
3. realising property in order to make a distribution to one or more secured or preferential creditors

Administrative Receivership

The holder of a floating charge over a company's assets created prior to 15 September 2003 may appoint an Administrative Receiver should the company default under the terms of the debenture.

Administrative Receivership is likely to be utilised to trade on a company to facilitate a going concern sale of its business and assets.

Company Voluntary Arrangement

A flexible process which is essentially a contract between a company and its creditors to "park" debt in such a manner that allows an eventual greater return to creditors, albeit often over time, than they could expect in a liquidation.

A proposal is prepared within a statutory framework that needs to be approved by the company and its creditors as must any proposed modifications to the original proposal.

Directors of "small" companies are entitled to obtain a short moratorium in order that they may propose a company voluntary arrangement ("CVA")

To take advantage of the moratorium procedure a company must satisfy specified criteria.

Creditors' Voluntary Liquidation

This is appropriate when a company is insolvent and has no prospect of continuing to trade profitably in the future. A company can be placed into liquidation and, if appropriate, at extremely short notice with the agreement of 95% of its shareholders.

Compulsory Liquidation

This is invariably a creditor driven process, which follows a winding-up order made by the court, usually on the petition of a creditor. It is a creditor's action of last resort in attempting to collect an outstanding debt.

Fixed Charge or Law of Property Act Receivership

Unlike Administrative Receivership, this appointment is made by a mortgagor who does not hold a floating charge over the company's assets. The Receiver is appointed to realise a specific asset for the benefit of the charge holder.

Bankruptcy

This is invariably a creditor driven process, which follows a bankruptcy order made by the court, usually on the petition of a creditor. It is a creditor's action of last resort in attempting to collect an outstanding debt. A debtor may also present a petition for his or her own bankruptcy.

Individual Voluntary Arrangement

A flexible process which is essentially a contract between an individual and their creditors to "park" debt in such a manner that allows an eventual greater return to creditors, albeit often over time, than they could expect in a bankruptcy.

A proposal is prepared within a statutory framework that needs to be approved by the individual and their creditors as must any proposed modifications to the original proposal.

Partnership Liquidation

This is invariably a creditor driven process, which follows a winding-up order made by the court, usually on the petition of a creditor. It is a creditor's action of last resort in attempting to collect an outstanding debt.

Partnership Voluntary Arrangement

An extremely flexible process which is essentially a contract between a partnership and its creditors to "park" debt in such a manner that allows an eventual greater return to creditors, albeit often over time, than they could expect in a liquidation.

A proposal is prepared within a statutory framework that needs to be approved by the partnership and its creditors as must any proposed modifications.

There may in addition need to be concurrent Individual Voluntary Arrangements for the partners.

Members' Voluntary Liquidation

A solvent liquidation that facilitates the closure or restructure of a company's business. It provides for all creditors to be paid in full (together with interest) within twelve months and for the distribution of surplus assets to its shareholders.

This allows for certainty in the cessation of a company's affairs.

Section 110 Insolvency Act 1986 Arrangement

This arrangement allows a liquidator to accept shares in a company as consideration for the distribution of assets of the company being wound up.

It is used for company demergers and reconstructions and in both scenarios tax benefits are always important factors.

Informal Arrangement

It is often possible to negotiate an informal settlement with creditors, which will restore a company to solvency. This clearly depends on individual circumstances and creditors will need to be offered more than they could reasonably expect to receive following a liquidation.

It is useful to have this so people know we are not a backstreet operation but in terms of getting work it has always been unclear.