David Oliver, a consultant solicitor with the insolvency and business turnaround team at Verisona Law, examines an Insolvency and Companies Court decision that non-compliance with the statutory provisions for the appointment of liquidators did not invalidate the first and second respondents’ appointments as joint liquidators of three companies.
Restructuring & Insolvency analysis: How should a court deal with conflicts between contemporaneous documents and the evidence of witnesses who have not been cross-examined? Nick Oliver, director and head of the insolvency and business turnaround team at Verisona Law, considers the Chancery Division’s approach in Fielding and another v Hunt, when hearing an appeal against a liquidator’s rejection of a proof of debt.
The directors of a development company have been found guilty of wrongful trading after continuing with a project long after they should have known it was bound to fail.
As part of The Enterprise and Regulatory Reform Act 2013 a new regime has been introduced for those wishing to apply for their own bankruptcy. Here are the main changes:
Even successful businesses with excellent prospects can falter if for example they have inadequate funding or have been brought down by a bad debt.
As a Director of a limited company you have various legal responsibilities – for example to act in the best interests of the company, to file accurate accounts and returns, and generally to behave honestly. If you believe the business has become insolvent, you must put creditors’ interests first. Failing to do so could leave you personally liable for any debts that run up.
If your business is getting into trouble it really could pay to grasp the nettle early and sort things out – while there is time.
This is a scenario that can bring down even successful businesses and underlines why it is important to keep stringent credit controls and contracts in place with your customers.
There is no stock solution for turning round a business in financial difficulty, but there are a number of options available to you, depending on your circumstances.
Nobody likes to think about their business becoming insolvent, but if it does, the personal liability you have for its debts will depend on its legal entity.