Working with an Insolvency Practitioner
Companies facing financial difficulties can often benefit from working with an insolvency practitioner (IP) before formally entering an insolvency process. This can help directors to understand their options, but can also create significant areas of risk during any subsequent insolvency proceedings. Having the right expert advice can help companies to access the expertise of insolvency practitioners while managing the potential risks.
At Isadore Goldman, we have very extensive experience working with insolvency practitioners and distressed businesses. We can help to manage a successful relationship, while being firmly on the side of a company’s directors at all times.
We understand the potential areas of risk and the very serious consequences directors can face. Working with our experts can help directors to share the information they need to with an insolvency practitioner, whilst making sure they do not share anything that could place them at risk if insolvency proceedings follow.
Our expert legal team can support directors with matters including:
- Early advice on risks to directors
- Working with an insolvency practitioner prior to insolvency
- Dealing with IPs during an insolvency
- Responding to investigations and proceedings brought by IPs
For immediate, practical advice about working with insolvency practitioners, please speak to our expert team today. You can get in touch at one of our offices in Norwich, Portsmouth or London, or email info@isadoregoldman.com.
Why choose Isadore Goldman for help dealing with an insolvency practitioner?
Independently recognised expertise
Our insolvency law expertise has been confirmed by high-profile client guides including Chambers & Partners and the Legal 500.
We work for you, not your company
As a director, it is very important that you get the best advice to protect your personal interests in an insolvency situation. By working directly for you, rather than for your company, we can always provide targeted advice to put you in the best possible position.
Sensible, plain English advice
We work with a wide range of businesses, so can provide advice tailored to your circumstances and needs, rather than the generic advice many other firms may offer. And we do it all in plain English, so you are crystal clear about your position and options.
How we can assist company directors working with insolvency practitioners
Early advice on risks to directors
If your company is facing financial difficulties, it is understandable to be strongly focused on what you can do to rescue the business. An insolvency practitioner may be able to help with this, but directors must be very careful to understand the risks that they may face personally if the business does become insolvent.
Our team can advise on directors’ duties in insolvency, including how their actions and decisions as well as company transactions prior to insolvency will likely be scrutinised. This can then allow directors to face their situation forewarned and forearmed.
As well as making directors aware of their legal responsibilities during insolvency, we can also advise on the best strategy for working with an insolvency practitioner. This can allow directors to do the best thing for their company and its creditors, while also protecting themselves legally.
Working with an insolvency practitioner prior to insolvency
If you choose to work with an IP before making the decision to enter an insolvency process, it is important to be very careful what information you share with them. It can be very easy to disclose something that the IP could then potentially use as evidence against you if your business becomes insolvent and they are appointed to handle the proceedings.
We can advise directors on how to interact with an insolvency practitioner in order to have a productive relationship.
Dealing with IPs during an insolvency
If you are a director of an insolvent company, then you should always take legal advice when dealing with an insolvency practitioner during formal insolvency proceedings. This can help you to meet your legal obligations while not saying or doing anything that creates unnecessary legal risk to yourself.
Our team regularly advises company directors during insolvency proceedings, so can bring our many years of experience to bear on your behalf.
Responding to investigations and proceedings brought by IPs
It is standard practice for the conduct of directors to be looked into during insolvency proceedings. This can be very daunting and with good reason – the personal risk to directors can be substantial with significant potential penalties if misconduct is uncovered. Any claim against a director of a dissolved company must, therefore, be taken very seriously.
We have the expertise to ably support directors under investigation as well as those who have had a claim brought against them. Our team can assist with all types of claims against directors, helping to avoid a formal claim where possible or secure the best outcome available where a claim has been brought.
Common questions about working with insolvency practitioners
What are the benefits of working with an insolvency practitioner before an insolvency?
An insolvency practitioner can be very valuable to a distressed company. In the best case scenario, they may be able to help save the company through options such as negotiating with creditors or entering into a Company Voluntary Arrangement (CVA).
Where saving the company is not possible, an IP can help the company to secure the best outcome for its creditors.
Working with an insolvency practitioner voluntarily at an early stage can also potentially reduce the risk of claims against the directors for acting improperly. This is because the IP would be advising on what steps to take, minimising the risk of directors inadvertently acting in a way that could be deemed improper.
What are the risks of working with an insolvency practitioner?
While working with an IP can be beneficial, the risk to directors cannot be ignored. The biggest issue is that directors will need to disclose certain information to the insolvency practitioner, but this could backfire if the company becomes formally insolvent.
Should the company become insolvent, the very IP that you have been working with could apply to be the person appointed to handle the insolvency proceedings. Any information you have given them could then be used against you by them.
It is, therefore, possible, that any disclosures you make to an IP prior to an insolvency could increase the risk of a claim being made against you if your company becomes insolvent and that IP is the one handling the proceedings.
Is it a good idea to work with a firm of solicitors suggested by your insolvency practitioner?
An insolvency practitioner retained prior to insolvency may suggest working with a firm of solicitors they have an existing relationship with. The danger here is that the solicitors would then normally be retained by your company, rather than by you as a director. They would then not be able to advise you on your own personal risk.
For this reason, we recommend choosing your own experienced insolvency law expert who can advise you personally.
How do you deal with an insolvency practitioner bringing a claim against you as the director of a dissolved company?
If an insolvency practitioner has brought a claim against you as the director of a dissolved company, then you need to seek immediate expert legal advice. This is an area in which our team has strong experience, so we would be happy to discuss how we can help.
You can find out more about how we can assist with these matters on our page covering claims against directors.
Contact our experts for help working with insolvency practitioners
For immediate, practical advice about dealing with insolvency practitioners, please speak to our expert team today. You can get in touch at one of our offices in London, Norwich or Portsmouth , or email info@isadoregoldman.com.