Corporate Insolvency FAQs

What is the Cost of a Consultation?

There is no charge for an Insolvency Consultation.

Who Pays the Liquidator's or Administrator's Fees?

The  fees are a first charge on the assets realised. In the event that the Company has no realisable assets and the Petition is presented by the Directors or Shareholders, then the fees will have to be paid by those parties.

Will I have to go to Court ?

There is no requirement for the Directors or Shareholders to attend Court and we will instruct solicitors on your behalf. 

Having commenced formal insolvency proceedings, what should Directors do next?

This is often the most difficult time for Directors' and that is why we advise using Solicitors experienced in corporate insolvency to ensure that the Liquidator or Administrator is in office as soon as possible. 

The period between the instructions to commence insolvency proceedings and the appointment of the  Liquidator or Administrator should be viewed as a kind of limbo.  The Directors have full executive powers but must avoid fraudulent acts which often take place at this time unwittingly. 

Each case will have its own special circumstances and should be fully discussed prior to the conclusion of the consultation.  Common problems will include the following:-

Payment of wages and salaries,

Payments to existing creditors,

Ordering of goods and services,

Sales of Assets,

Continuation of ongoing contracts,

Bank transactions,

Notification to third parties - bank, suppliers etc, etc.

 I have lent the Company money, will I get it back?

Any Director who has lent the Company money and sums are still outstanding at the date of insolvency is a creditor in his own right and will be eligible to rank for any future dividend like any other creditor of the same class, that is preferential or ordinary, all as the case may be.

The Company has lent me money, will I have to pay it back?

 Any Director who has received a loan from the Company and sums are still outstanding at the date of insolvency will be required to repay the sums outstanding in full as soon as possible.  If the sums due are considerable the Liquidator or Administrator may agree a repayment programme which may involve security over the repayment period.

What Reports are made to the "authorities" on the Directors ?

The Liquidator or Administrator is required to prepare a Report on the Conduct of the Directors and submit this to The Insolvency Service. The Report covers Directors who were in office at the date of insolvency and individuals who resigned pre insolvency. 

The Insolvency Service decide, based on information received, whether there are grounds for an Application to the Court to have all or some of the individuals covered by the Report disqualified from acting as Directors for a given period.

Furthermore if the Liquidator or Administrator uncovers activity which he believes should be reported to the Crown Office he will submit an appropriate Report.  Such Reports relate to criminal activity.