BWC consider that a formal insolvency procedure should be used only as an option of last choice. We will, where possible, look for alternatives routes which may rescue a business without the need of a formal insolvency procedure.
Working closely with the existing management team, professional advisers and other stakeholders, we are able to offer:
- Restructuring advice
- Turnaround advice
- Interim management
- Business reviews
- Cash flow management solutions
- Strategic advisory services
- Refinancing advice
- Advising directors upon the personal consequences of a corporate insolvency
BWC has the expertise and experience to advise on all aspects of Corporate Recovery and Insolvency. We have a proven track record of delivering tailored solutions to achieve the best outcome for all stakeholder groups.
Our partners and staff have wide ranging experience of all industry sectors including retail (including motor), manufacturing, construction, leisure (including tour operators), licensed premises, professional practices, residential care, education, sports clubs (including football league clubs) and charities. The formal corporate insolvency procedures are:
- Creditors' Voluntary Liquidation (insolvent)
- Company Voluntary Arrangement (CVA)
- Members' Voluntary Liquidation including s110 schemes (solvent)
Administration is a process which can enable a business to continue to trade whilst offering protection from any action brought by its creditors. The purpose of administration is often to allow the rescue of the business as a going concern, through trading the business whilst efforts are made to sell the business and assets. In certain circumstances it may be appropriate, and in the best interests of creditors for the Administrator to complete a sale of the business and assets of the Company immediately upon his appointment and without a prior period of trading. This procedure is commonly referred to as a "Pre-pack".
The Administration procedure can be commenced by the Company, its Directors or a creditor. The holder of a qualifying floating charge may also make application for an Administration order at short notice.
CVL is an insolvent liquidation procedure instigated by the Company's directors. It is typically undertaken when there is little or no likelihood of the business being saved as a going concern. The liquidation will typically involve the immediate cessation of the business and the sale of its assets on a piecemeal basis.
A CVA is effectively a contract (the proposals) between the Company and its creditors and shareholders. The CVA has the effect of ring fencing the Company's historic liabilities whilst allowing it to either continue to trade, whilst paying a proportion of its future profits to the creditors, or to conduct an orderly realisation of its assets.
To be approved, the proposals must receive 75% support (in value) of those creditors who choose to vote on the arrangement. Further, 50% of shareholders must also be supportive.
One advantage of a CVA is that the existing management continue to manage the business. The Supervisor of the CVA essentially only oversees the implementation of the CVA proposal.
The Receivership process has largely been replaced by the Administration process. Receivership is still however available to holders of floating charges which pre-date 13th September 2003.
Holders of fixed charges may, if their security documentation allows, appoint a Receiver under their fixed charge
Receivers may also be appointed pursuant to the Law of Property Act ("LPA"). The role of an LPA Receiver is to deal specifically with the property(s) over which he or she is appointed.
MVL is not an insolvency procedure, although it does require the services of a Licensed Insolvency Practitioner. MVL is typically used when the directors of a solvent business choose to cease trading. A majority of the directors are required to swear a declaration to the effect that all creditors of the Company will be paid in full, together with statutory interest within a period not exceeding 12 months. The Liquidator, duly appointed by the shareholders must realise the Company's assets, settle creditor claims before distributing any surplus assets (in cash or in specie) to the shareholders.
MVL can provide a tax efficient means for business owners to extract value from their Companies.
Section 110 of the Insolvency Act 1986 gives additional powers to the Liquidator appropriate in circumstances of demerger and reorganisation, typically where the trading activities of a Company are separated from the asset holding activities.
We advise individuals and partnerships, ranging from individual consumers with excessive credit card borrowings through to large unincorporated businesses, including sole traders and partnerships of professional advisers such as solicitors, architects and doctors.
We tailor the advice we give to each particular set of circumstances and when drafting proposals for Individual Voluntary Arrangements we do not adopt the "one type fits all" approach. By understanding the needs of the individual(s), we are able to formulate a balanced proposal which benefits all parties. When bankruptcy may be the best option we are not afraid to advise accordingly. The formal personal insolvency procedures are:
An IVA in essence is a contract between the insolvent individual and his/her creditors. The IVA ring fences the historic debt allowing the individual to continue in trade or employment whilst making contributions to creditors. IVA can also allow for the orderly realisation of assets by the debtor.
To achieve approval, an IVA requires the agreement of 75% (in value) of those creditors which vote upon it.
A PVA is a contract between the insolvent partnership and the partnership creditors. It allows the partnership to continue to trade whilst contributions are paid to creditors from ongoing profits, or whilst assets are realised for the benefit of creditors.
A PVA deals only with partnership liabilities and assets. In circumstances therefore where individual partners have personal assets and liabilities, it may also be necessary for those partners to enter into IVAs which will run in parallel to the PVA.
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due.
Anyone can go bankrupt, including individual members of a partnership. Although bankruptcy has a bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases.