News

Welfare changes impact Housing Associations

Government cuts to welfare have made a significant impact not just on claimants but just as importantly to housing associations, the lifeblood of whom, is the rent and service charge roll often funded through the welfare system.  Although there have been few if any insolvencies in this sector, it is important that boards pay attention to risk and ensure that they fully ...

Does a CVA bind all creditors?

The simple answer is yes, it binds all creditors who were entitled to receive notice of the CVA irrespective of whether they did infact receive the notice. This includes creditors who voted against the proposals. However, more than 75% of creditors attending the meeting of creditors that considers the proposal, in person or by proxy, must vote for it. ...

Insolvency and Social Enterprise

Social enterprises can also run into financial difficulty. Key to success in such a company, is maintaining the right balance between social outcomes and the all important financial success factors that drive the former. We regularly advise social enterprises on a range of issues including trading and investment strategies aimed at establishing both outcomes.  ...

Insolvency: The Warning Signs

There are a variety of signals that your company might be in financial trouble including problems paying liabilities (including VAT and PAYE), always exceeding its overdraft limit, problems obtaining new credit etc.  It is highly advisable to seek professional advice from an Insolvency Practitioner since directors’ can sometimes be held personally liable for the d...

Optimising debt and equity investment in a subsidiary

Financial and insolvency analysis plays an important part in determining the optimum mix of debt and equity investment in a subsidiary, especially in situations in which regulatory concerns on subsidiary investment are important.  One example is with the unregistered subsidiaries of housing associations. Not only must trading be on an arm’s length basis, all loan ...

Financial Analysis: Driving Decisions

A detailed financial analysis of a company involves the preparation of profit and cash flow forecasts as a basis for running scenarios to enable management to decide what decisions to take and what the financial consequences of these decisions will ultimately be. There is no substitute for a detailed financial model that allows variability of key and important factors since thi...

Dealing with HMRC Debts

Companies are regularly finding that they cannot meet their PAYE and VAT liabilities and require time to pay. Often a short report and analysis by an Insolvency Practitioner may be enough to provide HMRC with the comfort that it needs to approve the proposal. ...

The value of specialist advice

Accountants more generally do not have the expertise needed to advise on complex insolvency situations. An Insolvency Practitioner will have expert knowledge of cash flows and forecasts and the issues that affect a company’s ability to trade.   ...

HMRC Powers of Investigation

Directors must be aware that HM Revenue and Customs have wide ranging powers and can require the production of documents and papers in order to enable it to establish its claim in a liquidation.  Wrong doing can quickly lead to major problems as the tax liabilities in the company spiral and directors can potentially be the subject of a misfeasance claim. Legal advice sh...

The role of the official receiver

The Official Receiver plays quite an active part in a compulsory liquidation. He can assist in obtaining information from directors and also makes the application to the court for an order requiring the cooperation of a director.  ...

Compliance with Liquidators Requests

Directors of a company have a duty to comply with the requests of the liquidator. If they fail to do so he can apply to the court for an order requiring their cooperation. Of course if he does there may be cost implications for the directors.  ...

Rescue: Administrations and CVAs

Company rescue can be achieved within the framework of the Insolvency Act 1986. One powerful approach is to use the Administration route and the other is to propose a CVA to the creditors. Whilst under the former procedure, control is handed to an Insolvency Practitioner, the CVA allows control to remain with the directors, who are free to develop and manage a strategy for the ...

Company property work on the increase?

More property company work. This time monitoring mortgage activity for a client that needs to ensure that his large debt to the company is not being compromised. The information available from public sources and records is valuable provided one knows where to look.  ...

Corporate Voluntary Arrangements

An often overlooked option for directors of a struggling company is the Corporate Voluntary Arrangement or CVA.  This is very powerful and effective arrangement which enables a board to freeze liabilities at any point in time and continue to trade the business under their own control, not that of an administrator. The scope of a CVA is huge and limited only by the imagi...

Property company liquidations

Property company liquidation can be a problematic business given disputes over access rights and trespass. The administrator has to tread carefully and ensure that the bank’s title is not compromised and the value of the asset reduced.  ...

Securing financial records after insolvency

It is important to secure all the trading records of the company as soon as possible so that the financial transactions can be easily identified and assets located and secured. ...

Directors liabilities on insolvency

Directors of service companies are often surprised when they place an unwanted company into liquidation only to find that they have a residual liability for the company’s liabilities. This may happen if they have a directors’ loan account that is overdrawn or if they have paid themselves a dividend when the company has no reserves. ...

Charity Insolvency Revisited

Charities and Community Interest Companies have their own specific financial problems and it is important to ensure that Trustees and directors of the charity/CIC fully understand what their personal liabilities will be if the organisation ultimately fails. ...

Care of original documents

Investigation into a company’s financial affairs in preparation for a claim for misfeasance or wrongful trading require evidence.  It is critical not to write on original documents since this causes confusion and easy challenge by opposing counsel. ...

Falling charity revenues

Charities and Community Interest Companies (CICs) are just as exposed to the economic environment as are trading companies. Importantly they are suffering from falling revenues due to a reduction in charitable giving, costs may be rising and there is growing demand for their services owing to the rollback of government support in many cases. Charities that do not have large res...

Forensic analysis of expenditure

Forensic analysis of expenditure is a difficulty but beneficial exercise. It shows where a director has spent the company’s money and therefore what the true reasons are for company under performance.  ...

Companies that rely on Christmas trade

Companies that rely on the Christmas trade in order to survive for the remainder of the year, must conserve cash and maintain reserves. Many insolvencies arise after the Christmas period is over and customer returns and the net cash position is determined. Early advice is always best and pays dividends in the long term. ...

Charity Insolvency

The economic downturn has been indiscriminate in its affects on UK companies.  Banks, building societies, and high street retailers have all succumbed to some of the worse economic conditions the UK has seen since immediately after World War Two, when GDP fell in double digits. You could be forgiven for thinking that financial worries are the sole concern of the private se...

My company is in financial difficulty and I need help

There are a variety of procedures that you can use to get over corporate financial problems and you should take professional advice to help you decide between them. A corporate voluntary arrangement, also called a CVA, might well be the one approach that really helps you. CVAs are a powerful but often overlooked way of writing off much of the company’s debt, avoiding f...

Things Directors should do and things that they should not do

This is not a complete check list. You must take professional advice before you take any action these are a few of the things that you will need to consider. Things you should do. Take professional advice from a Licensed Insolvency Practitioner. Gore and Company understands the needs of directors and provides a free helpline and free consultation to assist or to simply...

The fiendishly clever accounting and taxation system

Directors of insolvent companies who think they can talk their way out of trouble often come unstuck when faced with a liquidator. The liquidator will look at ways in which to recover assets and he may well look to the directors. How might he do this? The liquidator will look at the accounting records and try and establish if there have been any payments that should be in...

They’re getting away with it!

Regrettably this is a complaint often heard from creditors when a company goes into liquidation and the liquidator feels obliged to look into the conduct of the directors.    The problem that the directors have is that they will be asked to explain what might very often be totally reasonable transactions, accounting entries and conduct more generally which are comp...

What to do when your salary and dividend are being looked at

Directors who are also shareholders, often place their company into liquidation in the belief that, if they have not given any personal guarantee of the company’s debts, they are free to walk away without having to contribute to the loss suffered by creditors.  This article explores just one of the ways in which this assumption may prove to be untrue. It may ...

Tax Problems?

Business tax liabilities, whether for corporation tax, PAYE or VAT, should not be ignored since HMRC are only too able to petition for the winding up of the company. Whilst they may be prepared to listen to a proposal to pay tax bills over a period of time, in practice a proposal put together by an insolvency practitioner is going to have a greater impact. The proposal shoul...

Is there a way to avoid insolvency?

The answer is usually yes but it all depends on the directors taking professional advice at an early stage. Management must be prepared to take urgent action to stave off insolvency which might lead to a creditor taking action to wind up the company. One of the first and important things to do is to get a full and detailed view of the financial position of the company. Wh...

Worried about personal guarantees?

Personal guarantees can be a real source of worry for directors. A personal guarantee is just that - personal to an individual and can, generally, be claimed against an individual. They can arise from a variety of sources including leases, supplier guarantees and bank guarantees. Sometimes, directors may not even be aware that they have given guarantees, and it is worth...

What is trading out?

Quite simply just what it says. It is a situation in which directors have sufficient confidence in the trading potential of the company that they decide to continue to trade with the aim of the company “trading out” of its financial difficulties. Usually this is only possible with the support of creditors. This is because the agreement of at least the major cr...

How Zombie Companies Survive

There has been much talk in the media recently about the existence of so called Zombie companies, those firms that can continue in business with outside support but cannot stand on their own without it. What sort of support are we talking about? In today’s economy there are a variety of reasons why a company might continue to trade when really it does not have a str...

What is the cheapest way for me to liquidate a company?

Directors are often concerned about how much it will cost to place a company into liquidation and whether they will need to personally foot the bill. Whether this is the case will depend on the circumstances. There are two choices for placing a company into insolvent liquidation. The first is to apply to the court for a winding up order and the second is to instruct a L...

How do I persuade creditors to give me more time without forcing a liquidation?

A formal insolvency procedure such as liquidation or administration is not always necessary but if directors are going to try and do a deal with their creditors they must make sure that they do not fall foul of provisions of the Insolvency Act, for example which deal with the situation where a company continues to trade whilst insolvent. and therefore advice must always be take...

Which insolvency procedure is most suitable?

The Insolvency Act provides several different procedures for dealing with a company that is insolvent or experiencing financial difficulty. Which of these is the most appropriate will depend on a wide variety of factors and professional advice must be sought in each case before taking any action. This article considers the types of questions that a Board might wish to ask itsel...

Why do some directors not worry about financial difficulty?

There are two answers to this question. The first one is that some of these individuals are directors of companies that are not in financial difficulty! The second one is more helpful!! Quite simply these other directors seek professional advice at the first sign of financial problems and obtain a full understanding of one or two very important questions. What should I do...

Future withdrawal of taxation aid to UK businesses may trigger further insolvencies

Many companies have relied on the "goodwill" of HM Revenue and Customs who have agreed to defer tax bills over some quite long periods to enable the company to trade through what will hopefully be short term difficulties. In most cases a condition of this type of agreement is that the company can meet its ongoing tax bills as they fall due. In other words why would...

More Fraud Detected as Credit Crunch Develops

An article in this week's "The Lawyer" by Samantha Bewick and Janice Edgar at KPMG looks at the impact of past fraud on the prospects for restructuring a business in difficulty.    The article can be found by clicking [here]. The article sets out a series of questions that should be examined to determine if fraud may have taken place in the pa...

Companies turning over £15bn enter insolvency in first two months of \\\'09

Statistics released by Insolvency News show that companies in the UK turning over in excess of £15bn have entered into formal insolvency processes in the first two months of 2009.  Their statistics also show that leading insolvency practices had to take control of 6,600 commercial properties and deal with over 97,000 employees. The downturn is af...

GAC Launches Business Recovery Initiative with RDAs

Gore and Company today announced its Business Recovery Initiative to the UK's Regional Development Agencies. In the present economic climate, Gore and Company is working to raise the profile of Business Recovery and Turnaround work with staff in the UK's regional development agencies. Gore and Company, whose Senior Partner, Tom Girn, is a member of R3: The Associa...

Refreshed Gore and Company Website Published

Gore and Company launched its updated website today, 1st November 2016. The new website follows the pattern of our recent reorganization of our Corporate Recovery and Insolvency business. The change in our firm's focus better reflects the services in which we excel: provision of high quality advice and consultancy on company insolvency and business recovery matte...

Early Turnaround Advice for Companies Facing a Downturn

Gore and Company have developed a range of services offered to companies that recognise that they may be in the early stages of a serious downturn. Following an initial meeting, during which we review the state of the business with its directors we can propose a range of services: Establish the Company's current financial position (in a more detailed way than can b...

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