Facing debt problems, insolvency and even the threat of liquidation is an extremely daunting prospect for any business, however corporate recovery solutions may be available that can help turn your business problems around, and ultimately could return your company to a position of stability.
Developing a sound corporate recovery strategy is not something that should be left to chance, and it can be comforting to know that there are specialist consultancies and advisers out there with the qualifications and the experience needed to help your business plot a route to recovery.
If you engage a professional corporate recovery specialist to help resolve your company’s financial or other difficulties, you will receive information and tailored guidance, usually from a licensed insolvency practitioner, about the best options to resolve your business’s unique situation. The advice you receive will include, but not be limited to, accounting and legal advice about how UK businesses can deal with their debt problems.
Solutions discussed may include corporate or financial restructuring, tailored debt solutions such as Company Voluntary Arrangements, right through to advice on insolvency and liquidation, and how this would affect your employees and company directors. Corporate recovery options discussed with companies typically include:
• Refinancing or restructuring corporate debt — in some cases, rearranging or consolidating existing debts can be an effective recovery solution.
• Administration — where an insolvency practitioner is appointed to manage the company’s day-to-day business affairs. Although directors may be understandably reluctant to lose direct control of the business, administration by a qualified and experienced practitioner can often provide great advantages in moving the company towards recovery.
• Company Voluntary Arrangement (CVA) — a formal debt repayment schedule drawn up by an insolvency practitioner and negotiated with your business’s creditors, to repay amounts owed in full or in part. This can be an extremely powerful tool as it can prevent creditors from pursuing debt collection or legal proceedings against the company for the duration of the arrangement.
• Receivership — where secured debts exist, it may be necessary to realise and liquidate company assets to repay debts owed to creditors.
• Voluntary liquidation — in cases where the majority of the directors of a company agree that it is irrecoverably insolvent, shareholders can vote to proceed with Creditors’ Voluntary Liquidation. At the end of this process the company will be formally dissolved and removed from the live register of businesses at Companies House.
• Compulsory liquidation — liquidation may be enforced by a court order following a successful petition by one or more of your creditors, or other interested parties.
The internet can be a useful source of information on recovery specialists in your area, for example searching for “Corporate Recovery Manchester” or “Corporate Recovery Sunderland” is a good first step to finding a local practitioner.
However, it pays to research a firm before engaging them — look for strong client testimonials or reviews.
Many insolvency and debt recovery businesses may advertise corporate debt solutions, but it’s important to check their level of experience as many actually specialise in personal debt — always ask questions about the business’s experience in handling corporate recovery for companies of a similar size to your own.