Financial Difficulty
Earlier in my career, a large government project on which I was advising hit financial difficulty. During that period, I experienced real first hand knowledge of insolvency situations, and, after that project, I took the Insolvency Practitioners Association CPI exam and passed with a distinction! I am not an insolvency practitioner, but I have detailed experience of advising companies that are in financial difficulty.
I can advise you on your options, including administration (including the possibility of a pre-packed administration where you buy the business back from the administrator), liquidation, and company voluntary arrangements. For all of these, you will need to appoint an insolvency practitioner, but I can guide you as to which is the best direction to take.
Key Terms
What is wrongful trading? Wrongful trading is when company directors continue to trade when they know there is no reasonable way that the company would avoid insolvency.
What is fraudulent trading? Fraudulent trading is the act of continuing to trade with the intent of a fraudulent effect.
What is a preference payment? A preference payment is a transaction where a company that is (about to become) insolvent pays a creditor to put them in a better financial position than they would be if the company were to be liquidated.
What is an undervalued transaction? An undervalued transaction occurs when a business asset is sold for significantly less than its market value.