Key issues in a corporate insolvency


A pre-pack is a sale of a company’s business or assets, or both, which has been arranged in advance of a company entering administration. Once an administrator is appointed over the company they will quickly close the sale (usually the same day or shortly thereafter) so that the company should either not need to incur the costs of trading in administration, or if so, this is for a very limited time. For further information.


On a company’s insolvency the funds in its pension scheme do not automatically form part of the assets of the company. For further information on what happens to a pension scheme on a company’s insolvency.

Directors and insolvency

Directors of a company have a duty to the members of the company when the company is in a solvent position. However, the balance shifts when the company starts to become insolvent, and the directors’ main concern must then be the company’s creditors. For further information.

Dealing with suppliers, customers and ROT claims

Although suppliers are generally unsecured creditors (unless they establish a valid retention of title (ROT) claim) they may be key to a successful turnaround or pre-pack sale. Equally, the support of customers is often an essential part of a successful turnaround business plan. For further information on how a company in financial difficulties should deal with a variety of suppliers and customers, and how to approach ROT claims put forward by suppliers.

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