Our Expertise and Services
We aim to quickly provide financial stress solutions for businesses, companies, partnerships, charities, clubs and other organisations. We will help you to think through available options by discussing the likely benefits and risks of each.
Call Peter now for a free no commitment, no names if desired, telephone consultation.
Advice and Assistance
Peter O'Duffy FCCA, as a Licensed Insolvency Practitioner since 1989, is the first point of contact for all new clients, and supervises the conduct of all cases.
Initial briefing meetings are used to provide an advice service to clients, not as an opportunity to obtain income generating work. Clients are often sufficiently empowered by knowledge and understanding gained at one meeting to deal with their problems without any further involvement by IP Services Ltd. Meetings can be held outside normal business hours.
Information provided by clients is reviewed, projections are prepared, if required, and recommendations are made, which are designed wherever possible to salvage businesses and employment, and in any case to minimise loss of asset value and of income potential in the interests of all parties having a relevant financial interest.
Options such as share sales, business and asset sales, inward investment, refinancing, repositioning, cost reduction, and informal agreements and arrangements with employees and creditors are usually considered before formal insolvency procedures. To the greatest extent possible, in order to minimise professional costs, detailed implementation is left to debtor and director clients, and IP Services Ltd confines its involvement to provision of advice at crucial points in the resolution process.
Informal agreements and arrangements with creditors are often not feasible because too many creditors are involved, whereupon IP Services can help with submission of formal settlement proposals to creditors.
Businesses and related employment can sometimes be preserved by a going concern sale of all or part of the business with the agreement of creditors.
If it is not possible to formulate realistic settlement proposals, it will probably be necessary to cease trading and to realise and distribute assets in accordance with legal requirements and priorities. IP Services Ltd can deal with this through the medium of a Creditors Voluntary Liquidation. By judicious planning, loss of asset value and personal hardship can be minimised without prejudice to creditors.
Corporate Voluntary Arrangement ("CVA")-
A Company makes a proposal to creditors
The CVA procedure, introduced with the Insolvency Act 1986, is a flexible procedure for insolvent companies, and can be a useful alternative to liquidation. An insolvent debtor company may formulate proposals to its creditors, normally with the assistance of an Insolvency Practitioner who is appointed Nominee by the debtor. The company sets out its history, its assets and liabilities, its actual and projected profitability, and the manner in which it is proposed to deal with creditors. Typically partial payment of liabilities over a three year period while the company continues trading is proposed. If successful, the unpaid balances of creditors' claims are written back; this typically creates a large credit to the profit and loss account which is not taxable; tax losses can be carried forward for offset against future profits. These are significant advantages.
In some circumstances the company can be protected from creditor enforcement action while proposals are being formulated.
The Nominee files in Court a report stating whether in his opinion shareholders and creditors should be invited to vote on the proposals. The Nominee then sends the proposals to shareholders and creditors and invites them to vote.
The shareholders and creditors may accept or reject the proposals, or negotiate amendments with the Board of Directors acting on behalf of the company. The company must convince affected parties that the proposed outcome will be more favourable to them than the alternatives of seizing assets or liquidation.
The creditors vote on whether to accept or reject the company's proposals, which may be modified by agreement. For the proposed Arrangement to be accepted, 75% of voting creditors by value must be in favour. The Nominee is normally appointed Supervisor of the CVA, with duties from then on to ensure that the terms of the proposals are complied with, to distribute funds to creditors, and to report periodically on progress.
The Supervisor will declare the Arrangement a success when all of its terms have been complied with. In the event of failure, the Supervisor is often obliged to petition the Court for liquidation of the company subject to availability of cash with which to fund petitioning costs.
IP Services can help trading partnerships by using a similar procedure known as a Partnership Voluntary Arrangement.
Petitions to Wind Up
In appropriate cases, IP Services can assist the directors to ask the Court to make an order that the company be wound up by the Court, acting, initially at least, through the Official Receiver.
Creditors Voluntary Liquidation ("CVL")
Since the introduction of the Insolvency Act 1986, the CVL has been a popular procedure for the liquidation of an insolvent company. It provides directors with an opportunity to explain their actions by preparing a written report to creditors, and enables shareholders to nominate a Liquidator of their own choice, subject to the creditors' ability to have that Liquidator replaced by their own nominee. Where necessary, appointment of a Liquidator can be done quite quickly in order to protect assets from creditor enforcement action.
The creditors can appoint a Liquidation Committee to assist and advise the Liquidator. A resolution regarding how the Liquidator should be remunerated is proposed.
The Liquidator's role is primarily to realise the assets of the company and to distribute funds to creditors in statutory order of priority. The Liquidator also has a duty to investigate the affairs of the company and to report to the Department of Trade and Industry under the Company Directors Disqualification Act 1986 as regards specified types of misconduct by the directors. In appropriate cases, the DTI may then issue proceedings to have directors disqualified. The Liquidator also has significant powers to issue proceedings against directors for compensation for losses caused by fraudulent or wrongful trading, or by deliberate preference of specific creditors over the general body of creditors; and also generally for recovery of assets.
The CVL can sometimes be perfectly legally used in conjunction with rescue of the business. Where circumstances permit, trading can continue until after the creditors meeting by means of a Caretaker Agreement with a prospective purchaser, and the business and assets can be sold by the liquidator at arms length to that or another purchaser. By this means employment and asset value can be safeguarded, and dividends to creditors maximised. The strict policy of IP Services is to sell assets for open market valuation, as determined by testing the market and / or by independent professional valuers, and to consult relevant classes of creditors. Specific additional safeguards apply to purchases by directors or associated parties.
Members Solvent Voluntary Liquidation
The MVL procedure can typically be useful when directors decide for whatever reason that a solvent company should cease to trade and that its affairs should be fully wound up. It can be a tax efficient vehicle for shareholders to realise their capital investment in a company.
An MVL is not strictly an insolvency procedure as the company must formally be declared by the directors to be solvent. A licensed insolvency practitioner is appointed by shareholders to realise assets if not already done by the directors, to pay remaining creditors in full, and to make distributions to shareholders.
In the process of winding up the company's affairs, the value of the company assets and of shareholders' capital is crystalised and there can often be significant taxation implications for the company and the shareholders. Careful tax planning must therefore be carried out well before appointment of a Liquidator.
This information is written in general terms and cannot be fully comprehensive. Its application to particular circumstances will depend on specific facts. The views and suggestions set out are not intended to constitute professional advice or to be a substitute for specific advice.