Corporate Restructuring & Insolvency
Restructuring is not solely about an insolvency process. Our team at IBB understands that most businesses prefer to avoid insolvency if possible and we work closely with our clients and third-party advisors to try and achieve outcomes that give business owners options.
Businesses do experience financial difficulties at some stage, and it is important to recognise you are not alone in this situation and to take action at an early stage. The earlier you take advice the more options and control you will have of the outcome. IBB can help you by guiding you through this stressful period and identifying outcomes and processes that you may not have considered, whilst enabling you to stay on the right side of your statutory duties. If you do find your company in difficulty, IBB can work with you to find the best outcome for your creditors.
Experienced Insolvency Lawyers
Our Corporate Restructuring & Insolvency team is well-equipped to assist with all types of business rescue plans and corporate restructures, irrespective of the value and complexities involved. Where a business cannot be saved, we can assist company stakeholders, creditors and office holders to achieve the best outcome for everyone involved. We also act for directors or interested parties on the receiving end of actions by office holders.
We have handled rescue plans, restructures and insolvencies for clients ranging from start-up companies to large, established businesses including UK and overseas private and public companies. We can advise both shareholders and directors on the personal impact of insolvency and our team regularly support insolvency practitioners in all aspects of their work.
Our corporate specialists will endeavour to develop a legal strategy to manage your risk, whilst arranging new sources of finance to save all or part of your business or dissolving the business, if that is required. We have extensive links with insolvency practitioners, banks and other professionals who support us (and who we support) in providing pragmatic advice.
Making the decision to restructure, put in place a recovery plan or dissolve a company is typically very stressful, with a range of economic, financial, organisational and personal factors to consider. Using our many years of experience, our corporate and litigation teams can guide you through this difficult time, protecting you legally and financially.
Why choose IBB Law?
We understand our clients and provide clear and pragmatic advice to them. Leading legal directory Chambers & Partners describes Sarah Jackson’s approach as “[Sarah] provides no-nonsense, pragmatic advice, balancing the costs and the benefits.”
The team is able to draw on the expertise of others within the wider firm to provide tailored advice in connection with issues relating to areas including property, employment and charities.
Who can we help?
- Insolvency practitioners
- Directors and business owners
- Individuals and their families
- Purchasers looking to acquire a business or assets from an insolvent party
How can we help?
Our dedicated team of specialists have a wealth of commitment, experience and knowledge in advising on all aspects of restructuring and insolvency.
As the director of a company, your business becoming insolvent can have a major impact on you personally. It is therefore essential to get expert legal advice on your legal obligations and the steps you can take to mitigate the risk to you and your career.
Our Corporate Restructuring & Insolvency team regularly advise directors of insolvent companies on matters including:
- Claims against directors
- Requests for co-operation
- Director’s disqualification
- Defending wrongful/fraudulent trading claims
- Defending antecedent claims and misfeasance claims
- Defending a statutory demand/bankruptcy petition
- Acting for Trustees in Bankruptcy (TIB)
Internal re-organisation of a business and/or corporate structure can allow you to modify your company’s capital structure and/or operations to make the business more efficient or commercially viable.
Some forms of restructuring include:
- Reduction or division of share capital of a company
- Re-arrangement of companies within a group of companies
- De-merger of a business
Companies restructure for a number of reasons which include tax efficiency, increased commercial efficiency or the purchase of a company that is facing financial problems and/or is likely to become insolvent.
Our Corporate team can assist with all aspects of corporate restructuring, including:
- Advise on different corporate structures and their advantages
- Any potential pitfalls of restructuring and how to mitigate these
- Preparing the necessary legal documentation for your restructure
- Updating records with Companies House, finance providers & other relevant parties
- Ensuring compliance with all relevant laws and regulations
Entrepreneurs’ relief can allow you to pay less Capital Gains Tax (CGT) when you sell all or part of your business. Rather than the standard 20% CGT rate you would normally pay on the sale of a business or its assets, if you qualify for entrepreneurs’ relief, you could pay just 10% in Capital Gains Tax.
If you are selling all of part of your business, you must be a sole trader or business partner who has owned your business for at least 2 years to be eligible for entrepreneurs’ relief. You may wish to consider a solvent liquidation process to enable you to exit your business on the best terms.
Our team can:
- Advise you on whether you qualify for entrepreneurs’ relief
- Draft and review any necessary documentation for the sale
- Guide you through paying the correct level of Capital Gains Tax with the relevant tax rules whilst working closely with your existing advisors, or recommend new advisors if required
A company may be put into administration by a court order or an out of court procedure available to the company, its directors, the holder of a qualifying floating charge or other creditors. The aim of an administration is to save a business where possible or, where the company cannot be saved, for it and/or its assets to sold to meet the business’s debt obligations.
Once a company is put into administration, an administrator is appointed who then conducts the affairs of the company and takes over its management. At the point that the company enters into administration, it has the protection of a moratorium which prohibits creditors from instigating or continuing with a legal process against the company without the consent of the administrator or the permission of the Court.
Our Corporate Restructuring & Insolvency team can assist companies entering administration, administrators and creditors of businesses in administration with matters including:
- Acting for administrators
- Appointing administrators
- Claims against directors
- Pre & post sale restructuring
- Asset sales
Often referred to as ‘winding up’, this is an insolvency procedure under which the assets of a company are realised and distributed to creditors by the appointed liquidator as prescribed by legislation. Liquidation can be compulsory or voluntary.
Compulsory liquidation is instigated by a creditor and following a Court order, the liquidation commences. A voluntary liquidation is instigated voluntarily by the members or creditors of the company. Unlike the administration procedure, liquidation always results in the dissolution of the company.
Our Corporate team can assist with matters including:
- Defending statutory demands/winding up petitions
- Applying for a Validation Order to allow your business to continue trading
- Acting for liquidators in claims against directors
- Defending Directors against claims from office holders
Where your company has become insolvent, you can apply for a Company Voluntary Arrangement (CVA) allowing you to pay your creditors over an agreed period. This can allow your company to continue trading, but only if 75% of your creditors by value agree to the CVA.
This process requires that an insolvency practitioner is appointed. Once commenced, a compromise or other arrangement with creditors is implemented under the supervision of the appointed insolvency practitioner (as the nominee before the proposals are implemented, who then becomes known as the supervisor).
If the relevant majority of creditors vote in favour of the proposals at properly convened meetings of creditors and shareholders of the company, the proposals are binding on the creditors and the company. However, the arrangement does not affect the rights of secured or preferential creditors (those creditors whose claims rank in priority to other unsecured creditors and floating charge holders which include certain employee claims and contributions to pension schemes), unless they agree to the proposals.
The additional benefit for small companies is that they have the option to exercise a moratorium before any CVA is put into place.
We can assist with:
- Advice on the suitability of a CVA for your business
- Negotiating the terms of a CVA with the insolvency practitioner, company stakeholders & creditors
- Ensuring the CVA complies with your corporate governance obligations
- Advice on alternatives to CVAs, such as pre-package sales
When a company becomes insolvent, the impact on creditors can be very serious, with the potential to seriously harm profits and, in the most extreme cases, even lead to the failure of the creditor’s business.
Getting the right legal advice can allow you to minimise any risk to your own business, including helping you to submit and assert your financial claims and giving you the best chance of receiving the money your business is owed.
Our Corporate Restructuring & Insolvency team can assist creditors with matters including:
- Providing proof of debts owed & addressing any challenges
- Attending creditors’ meetings
- Defending requests by liquidators or administrators for the return of monies received from the insolvent business
- Challenging the validity of a CVA
- Taking action where a company has failed to adhere to the terms of a CVA