One Hour Series

The stand-alone moratorium provisions came into effect in June 2020, introduced as a new solution for companies facing financial difficulties. Businesses that survived the pandemic and its restrictions are now facing the economic consequences of a cost of living crisis, volatile fuel costs and uncertain economic conditions and a moratorium may well give them the breathing space that they need, while they assess their options.

Creditors Voluntary Liquidation (CVL) is the most common insolvency procedure: a process driven by directors of the company, assisted by us as insolvency practitioners. There are various ways of structuring the process within the statutory deadlines. But it can be a challenge to get the timescales correct, taking into account delivery of the required documents and decision dates.

Members’ voluntary liquidations are the principal process for the return of capital to the shareholders of a solvent company, but what other options might be available as an alternative to MVL?

What is a director’s loan account and why does it matter in insolvency? Often, it’s the only asset in a liquidation, and its repayment is the only possible source of recovery for creditors. In light too of the focus on bounce back loans and the mis-use of covid support schemes, it’s important that we understand the role of DLAs in our reporting requirements and recovery strategy.

The right to claim retention of title (ROT) sits in the contract between supplier and purchaser, but it is the insolvency of the purchaser that triggers the supplier’s right to claim. It’s unusual for suppliers of physical goods not to have ROT in their terms and conditions, so as insolvency practitioners we need to be confident in our dealings with ROT claims.

The Ethics Code underpins everything we do as an insolvency practitioner, and SIP 1 and the Code set out the framework within which we all operate. Our ethical approach should be at the forefront of our practice, both in terms of assessing and taking on a case and then throughout the life of the case itself. Take the time in this One Hour Series to reflect on the Code, its requirements and your obligations.

The insolvency practitioner’s relationship with HMRC is mutual: on appointment we share information about the tax payer and come to a mutual conclusion as to HMRC’s claim, dividend recovery and (eventually!) tax clearance. Like all relationships, it has its ups and downs, issues with communication and unrequited emails, but we get there in the end, notwithstanding the tears along the way.