Advice to Directors

The insolvency legislation prescribes a range of penalties aimed at directors of insolvent companies who have acted in such a way as to prejudice the position of creditors.

When a company becomes insolvent the interests of the creditors is paramount and the directors have an obligation to protect the assets of the business and also ensure that the loss to creditors does not increase. This latter obligation can be particularly important and extends to both ensuring that the company does not take on credit it cannot afford to repay and also does not incur further liabilities increasing the overall loss to creditors.

Directors must be aware of their responsibilities and indeed be aware of inadvertently falling foul of the legislation especially as far as issues such as wrongful trading, preferences, transactions at an undervalue etc are concerned.

Early consultation with an Insolvency Practitioner means that the Board can ensure that they take actions that are consistent with acting in the best interests of all corporate stakeholders. Ongoing advice and guidance over a period of months until the company recovers from its financial difficulties is often prudent. 

Gore and Company provides a service which assists directors to monitor the company’s financial position, and provides ongoing advice to directors to ensure that during times of financial difficulty they continue to act so as to avoid subsequent criticism if the company should ultimately fail.

This service may involve a one off consultation based on a current assessment of a company’s financial position or it may involve a periodic review of financial projections. Investors as well as directors value the peace of mind that this service brings. Knowing that an independent expert has confirmed that actions being taken during a period of financial difficulty will not expose the Board to criticism can be valuable whilst the company seeks to raise fresh capital, reduce costs or indeed sell parts of its business.

HQ ADDRESS: QWest Suite 2.04, International House, 1100 Great West Road, Brentford, London TW8 0GP