Insolvency Articles and News

If a company cannot pay its debts as they fall due, the company has become insolvent. Once a company becomes insolvent, the directors of a company have a primary duty to the creditors of the company, rather than the shareholders. The directors have a duty to protect the assets of the company, and ultimately to cease trading, to ensure that creditors are protected as far as possible. If the directors decide that the only way to properly protect creditors is to place the company into insolvency and wind the company up, they also have a duty to engage with the liquidators. 

A creditor of a company can seek to make it insolvent, in the hope that they can recover at least a proportion of what is owed to them. In these circumstances, care will need to be taken to ensure that the creditor only pursues their debt in a cost efficient way.

We can help whether you are the owner of an insolvent business and need advice about what your duties are and how best to wind the company up, or if you want to recover money from a business that has become insolvent. If you think that your company has been made insolvent wrongly, by a creditor who had no right to pursue you, or by an error of the court, we can help you put things right. This is a specialist area of law, which requires expert legal advice. We have been helping clients in your situation for decades, and would be very happy to hear from you.