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Insolvency Litigation Solicitors

Owing money to your creditors is not a situation that any business wants to be involved with, but unfortunately, it is more common than expected, and where this occurs it can have considerable implications on the business. If insolvency matters are not correctly handled, the future of the business could be at risk, and this is something no business wants.

Resolving matters with the support of an insolvency litigation solicitor is essential for potential problems to be side-stepped and for the business to have a successful outcome so it can continue to grow and develop its brand.

Our insolvency litigation solicitors have worked alongside a range of businesses, across various industries, to overcome what can be considered as one of the most challenging periods a business can suffer from.

At Stephen Rimmer, our team have years of combined experience and knowledge in both simple and complex causes, providing reassurance of our ability to provide the support and guidance you need.

How we can help with insolvency litigation

Having your business struggle with money and the chance of it not surviving is something no business wants to face. No matter the type of insolvency litigation you are suffering from, whether simple or complex, our solicitors can provide tailored advice to suit your circumstance and to achieve what you need.

Our insolvency litigation solicitor’s expertise includes:

  • Company Voluntary Arrangements (CVAs)
  • Refinancing
  • Liquidation
  • Claims against directors
  • Winding-up proceedings
  • Statutory demands
  • Corporate restructuring
  • Administration

Consult our insolvency litigation solicitors in Eastbourne and Hastings

For clear, expert redundancy advice, please contact a member of our commercial litigation team for a no obligation discussion:

For more information on our services, see our commercial litigation page.

Insolvency litigation FAQs

What is the difference between insolvency and liquidation?

Insolvency and liquidation are commonly mistaken for being the same thing, but they are completely different.

For a business to be considered as insolvent, it means that it is no longer able to pay off its debts, and more specifically, it means that the business has more liabilities than assets on the business balance sheet.

Different to insolvency, liquidation is a process. The business will sell its assets in order to pay the debts owed to its creditors. The liquidation process officially closes the business and will remove the company from the Companies House register.

What options are there when a company is insolvent?

If a company is classed as insolvent, there are a couple of steps that can be taken before it is necessary to cease trading.

Reach an informal agreement with creditors

Trying to make an informal agreement with your creditors should be done immediately when the business is aware of their difficulty.

It is possible to make a non-legally binding agreement with your creditor(s) to change the terms to suit your needs and circumstances. This could be by extending the amount of time you have to repay your debts. However, it’s worth noting that this could increase the amount of interest you owe.

Company Voluntary Arrangements (CVAs)

A CVA is extremely similar to reaching an informal agreement with the business’s creditors. However, the one difference to note is that a CVA is a legally binding arrangement, unlike an informal agreement. For a CVA to happen, at least 75% of creditors need to be in agreement.

The business and the creditors will aim to find a solution that can rescue the business from entering into voluntary liquidation or being wound up, such as paying a proportion of the owed debts instead of the entire amount.

Administration

When a company decides to proceed with administration in an attempt to save the business from going insolvent, the business reins will be passed onto an insolvency practitioner, otherwise known as the administrator.

The administrator will take several actions to rescue the business so they can continue trading, including:

  • Coming to an agreement with the creditors – this is down to the discretion of the creditors as to whether they will agree
  • Release assets to pay creditors
  • Selling the business as an ongoing concern
  • Restoring the company’s ability to achieve profits

During the administration process, the business creditors will not be able to take any action, including recovering debts or initiating compulsory liquidation. It is, however, possible for the business to be wound up if the courts permit to these actions being carried out.

Administrative receivership

When a business is put ‘in receivership’, it is done by a floating charge holder, which is most usually a bank, to try and obtain the money owed to them. A private insolvency practitioner will be appointed as ‘the receiver’ to recover money to pay themselves, secured creditors and the debt owed to the floating charge holder.

When receivership occurs, the receiver must not repay any debts to unsecured creditors.

Liquidation or winding up

Liquidation is a process that winds up or, to simply put, ends the business. A liquidator, who is usually an official receiver, or an insolvency practitioner will manage the process.

The process of how it’s done is down to whether the business is an insolvent or solvent company, and there are three ways to liquidate a company, such as:

  • Members voluntary liquidation – where the company is solvent and is able to fully pay back its debts to creditors
  • Creditors voluntary liquidation – a decision made by the business’s directors and shareholders
  • Compulsory liquidation – this occurs when the creditor petitions to wind up the business

The liquidator will carry out a number of tasks, including but not limited to:

  • Completing, transferring or ending any employee contracts
  • Selling any business assets
  • Resolving any business disputes
  • Collecting any money that is owed to the business
  • Bringing the business to an end
  • Paying back funds to creditors
  • Repaying share capital to the business shareholders

How can a winding up petition be avoided?

It’s undoubtable that no business wants to have to cease trading, but where creditors are owed money, then they may choose to apply to the court for a winding up petition to reobtain these finances.

When creditors have applied for a winding up petition, the business has seven days to respond. In an attempt to prevent this from happening, they can do the following:

  • Pay off the creditor
  • Agree to a Company Voluntary Arrangement (CVA)
  • Put the business into administration
  • Enter into a Creditors’ Voluntary Liquidation
  • Dispute the debt or the amount of debt owed
  • Negotiate with the creditor

Our Insolvency litigation solicitors’ fees

At Stephen Rimmer, we believe in complete transparency, and that’s why when it comes to our legal fees, we will always be forthright from the start.

Some of our services can be charged on a fixed fee basis. But for more complicated work, our fees will be based on the level of legal expertise and whether ongoing support is required to reach the desired outcome.

Speak to our insolvency litigation solicitors in Eastbourne and Hastings

From our offices in Eastbourne and Hastings, our team advises businesses all across East Sussex, including in Bexhill-on-Sea, Hailsham, Polegate, Battle, Pevensey and St Leonards-on-Sea.

To find out how we can help with insolvency litigation for businesses, please contact our expert team now:

How can we help you?

Call us today on 01323 644222 to get the specialist help you need.