Providing expert business advice on company rescue, restructuring and insolvency 

Trading in difficult circumstances can result in a wealth of problems, impacting on both creditors and directors. Often companies continue to trade in financial circumstances that could give rise to potential personal liability for the company’s officers as well as possibly exposing creditors and other stakeholders to greater losses.

At PCR we believe in avoiding formal insolvency proceedings where possible and provide, where appropriate, clear advice on trading out of difficult circumstances by eliciting support from stakeholders in financial restructuring.

Sometimes formal insolvency processes cannot be avoided and in these circumstances PCR provide assistance in the full range of insolvency processes carried out under UK legislation.

We have offices in Uxbridge, Newcastle, London, Bristol and Sussex with additional representatives in Hertfordshire with clients coming to us from all over the UK.

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Case Studies

  • “Lee proved yet again that he was able to profitably manage the business, and craft a sale that provided value for stakeholders in what was a commercially and technically difficult situation.” Stewart Perry – Clyde & Co      Read This Case Study ››

  • “We felt a great deal of relief when we instructed PCR as we assumed it was the end of the road for our business. PCR recommended some tough measures but the results speak for themselves.” Finance Director      Read This Case Study ››

  • “PCR having the foresight to involve us early on allowed us to assist them in maximising realisations.” Quantity Surveyor      Read This Case Study ››

The Process

Voluntary Liquidation is the legal process used when a company’s directors themselves decide to wind-up a company’s affairs. Unlike Compulsory Liquidation, neither the Courts nor the Official Receiver are generally involved in placing a company into Voluntary Liquidation.

Voluntary Liquidation can be used by both solvent and insolvent companies. In both cases, the Voluntary Liquidation is started by the convening of a board meeting followed by a meeting of shareholders. Shareholders must usually receive 21 days notice of the meeting, although the company can then be placed into Voluntary Liquidation in a matter of hours if 90% (95% in some cases) of the shareholders agree and there is an urgent need to do so.

After the shareholders’ meeting there must be a creditors’ meeting, often held on the same day. Creditors must receive a statutory minimum of 7 days notice, although 14 days is generally considered to be better practice. Often creditors will receive 3-4 weeks notice.

Both Voluntary and Compulsory Liquidation generally protect the company from further enforcement action being taken by any single creditor whilst its affairs are wound up in an orderly manner by the Liquidator. Liquidation will also normally mean that the company concerned will cease to trade and its staff will be laid off, unless a successor company takes over the business.

The Liquidator

The Insolvency Practitioner (IP) who acts as Liquidator in the process is generally selected by the company’s directors, in agreement with the shareholders. However, in the case of an insolvent company, the creditors can vote for a different Liquidator, and if they do, their choice will prevail.

The duty of the Liquidator, regardless of who has chosen him, is to sell the company’s assets for the best possible price and to ensure that the company’s assets are shared out fairly amongst its creditors.

The Liquidator must also produce a disqualification report (D-Report) on the conduct of each of the company’s directors.

Re-start after Liquidation

Whilst the Liquidator must endeavour to achieve the best possible price for the company’s assets, he is not prevented from selling the assets to the existing directors, provided the transaction is disclosed to the creditors in the proper manner. The sale of a company’s assets to a connected party (such as its directors) is controlled by a practice statement to which Insolvency Practitioners must adhere: Statement of Insolvency Practice 13 (SIP13).

It may be possible, therefore, for the directors to open a new company to legitimately take over the old business (known as a “Phoenix”). However, it is important that such re-starts are only undertaken with the appropriate professional advice.

Directors owe duties to their existing companies (and their creditors) and may be in breach of these if they simply try to take over the business, either before or after a Liquidation, without utilising the proper processes. There are also restrictions upon directors with regard to re-using the name of a company that has been put into Liquidation, and potentially severe penalties for doing so if they have not legitimately purchased the rights to the name.

Although not generally a popular practice amongst the creditor community, a CVL re-start can save a viable core business, preserving jobs and creating future trading possibilities for suppliers and customers. For the smaller enterprise, a CVL re-start may be the only realistic option. However, recurrent Phoenix operations are likely to lead to an adverse conduct report and could result in disqualification from acting as a director.


PCR Voluntary Liquidation (CVL) Fact Sheet ››
 A useful summary of the Voluntary Liquidation (CVL) process published by PCR.

R3 Creditors’ Guide to Voluntary Liquidation ››
 A guide for unsecured creditors published by the Association of Business Recovery Professionals.

R3 Creditors’ Guide to Liquidators Fees ››
 The official legal wording relating to Liquidators Fees.

Insolvency Service “How to Wind Up Your Own Company”. ›› 
 A useful guide to dealing with debt through winding up a company, published by 'The Insolvency Service', a government agency.

R3 Statement of Insolvency Practice 13 (SIP13) – “Acquisition of Assets of Insolvent Companies by Directors” ››
 Guidance notes relating to insolvency practice published by the Association of Business Recovery Professionals.

Insolvency Service “Guide for Employees”. ››
 A useful guide to Redundancy and Insolvency for Employees published by 'The Insolvency Service', a government agency.


PCR News Blog

  • Danny Allen now Partner at PCR

    We are pleased to announce that Danny Allen, Licensed Insolvency Practitioner, has become Partner at PCR with effect from 1 July 2018. Danny, who has been in the industry for 18 years, has a wide range of experience in…
  • Business Insolvencies expected to rise in 2018

    At the back end of last year, PCR reported on the rise of Corporate Insolvencies, citing several factors as possible contributors. This included rising business rates, an increase in inflation, the weaker pound and a…
  • Dramatic rise reported in care home insolvencies

    An article posted 3 years ago on the PCR website depicted the growing concern regarding the potential rise in care home insolvencies. The severe financial difficulties facing many care homes at the time meant that the…
  • The ominous predicament of the UK high street

    It’s rather difficult to follow the news nowadays without noticing another retailer facing challenging trading conditions on the UK high street. Of course, it was Toys R Us which was the most recent high-profile…
  • PCR at the Somerset Business Show

    On Thursday 22 March 2018, PCR exhibited at The Somerset Business Show held at Taunton Racecourse. It was a terrific opportunity to meet and converse with numerous businesses from across the country, all ranging from a…

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