Personal and Corporate insolvency

Personal and Corporate insolvency

To threaten bankruptcy or the liquidation of a company is a powerful tool for any creditor, actual or purported. The first step in seeking to do this is to serve a statutory demand. If the recipient can show good reason, this demand can be set aside. However, this application which must be supported by evidence, has to be made within 18 days. Time is therefore of the essence and it is crucial to ensure prompt instruction of solicitors with the necessary expertise to deal with to advise on and make the application under strict pressure of time. Similarly, application can be made to set aside a petition for bankruptcy or to wind up a company. It is imperative that this is made before the petition is published as knowledge of these events by the world at large can be catastrophic even if no order is subsequently made.

When an individual is declared bankrupt or a company enters liquidation there can be a number of consequences and implications not just for the individual or company concerned but also for creditors and company officers. There will also be circumstances where the insolvency practitioner appointed as trustee in bankruptcy or liquidator will require the benefit of advice and representation.

Where creditors and/or insolvency practitioners believe funds have been dissipated or if a business has been operated in breach of the Insolvency Act 1986, claims can be brought by the insolvency practitioner against bankrupts, company officers and third parties for the recovery of such assets. We are able to provide advice and representation whether that be in connection with the bringing or defending of such claims.

Recent examples include the following:

• Successful application to set aside statutory demands issued by an international finance company against customers;
• Advising on the annulment of a bankruptcy order;
• Representing former Directors in claim for recovery of monies paid from company as a preference and as a transaction at undervalue;
• Advising a company leading to the withdrawal of a winding up petition.

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