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Always plan ahead – it wasn’t raining when Noah built the ark

By Lauren Auburn

BRI Business Recovery

BRI were recently contacted by a client and their opening line was ‘I need to put my company into liquidation immediately’. The client wanted to attend our office that day to sign the necessary paperwork to start the process.

Following a meeting with that client, it was clear that if the company did cease to trade on that day, some of the asset values would reduce considerably. However, with some careful planning and negotiation, we were able to assist the director in securing a sale of a lease which resulted in a secured creditor, that the director had personally guaranteed, being paid in full.

Placing a company into an insolvency process is probably the most straightforward part of our job as it is done by either the passing of a special resolution or by a court order. What a lot of people are not aware of is the time and effort spent planning the process prior to an appointment. The planning can be challenging as we sometimes have only a short time to do it in, the deadline usually being when a company is going to run out of funds.

As insolvency practitioners we advise companies from all sectors. What this means is that we have to think about what effect an insolvency process will have on a particular business. For a short period, whilst managing a closure or rescue, we have to fully understand the businesses we are dealing with in order to properly advise a client.

In addition to considering the effects of the insolvency process, we also have to take into account and manage a number of other issues, namely creditor pressure, possible legal action, threats to assets and some employee issues. All of the above are dealt with at the same time as also trying to find a suitable solution for all stakeholders. Unfortunately, there is never a perfect solution; there never can be for an insolvent company, but what we try to achieve is the ‘least bad’ outcome.

The whole process can be very daunting for directors, especially when they see the speed we sometimes have to work at and the pressure that can be placed on all involved. At BRI we always make sure that directors feel fully supported through the process and that everything is explained clearly. We take the time to understand a company and its circumstance before advising what options are available.

If you feel that you or one of your clients might benefit from a discussion with us on any insolvency matter, contact Lauren Auburn or another member of the BRI management team on 01604 754352.

Companies mentioned in this article

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