The need

You may be:

• A shareholder or director who wishes to wind-up a solvent company.
  
  
• A shareholder or director of a company that is facing serious cash flow/ solvency problems and you wish to identify the best course of action.
  
  
• A business person who is dealing with a company you fear to be insolvent.
  
  
• A bank or creditor who holds a charge over an asset or other security from a company that owes you money and you are unable to obtain payment.
  
  
• A dissatisfied creditor of a company who cannot get paid.
  
  
• A shareholder or director dealing with a defaulting company with serious arrears in liabilities and compliance wishing to correct the situation.
  
  
• A person facing severe cash flow problems or bankruptcy in a
  personal capacity.

Our expert in this area is Brian McEnery. We can advise you in any of the above situations and usually we can act as either liquidator or receiver of a company with a view to an orderly winding up or release of charged assets to the charge-holders.

Not all insolvencies arise in companies. Unfortunately they also arise in individual circumstances where for instance an individual may be running a business as a sole trader. Often they are so captivated by worry that they can’t see the wood from the trees. When a person finds themselves in difficult circumstances like this, they should get independent professional advice.

Know-how – varying scenarios

Companies are either solvent or insolvent on winding-up.

Solvent winding-up may arise where a special purpose company is no longer needed or when a particular venture is over and the shareholders wish to dissolve their relationship or for tax purposes. A solvent winding-up is a relatively simple process – typically by way of “Members’ Voluntary Liquidation”.

Solvent dormant companies may, in certain circumstances be wound up by way of voluntary strike-off.

On the other hand, there are times when corporate rescue is no longer a possible option. In a situation where a company is insolvent without the possibility of rescue through the appointment of an examiner, then the best strategy for directors to pursue is an orderly winding up of the company.

Often a sign of corporate failure is a company’s inability to meet repayment obligations to its financiers. In these circumstances, the financier may be entitled to appoint a “receiver” or a “receiver and manager”. They are appointed on foot of a fixed or floating charge after an event of default has occurred.

Where the company is insolvent, the directors and shareholders should obtain professional advice with a view to considering the winding up of the company. Such liquidation is called a “Creditor’s Voluntary Liquidation”. It is likely that if the directors and shareholders act responsibly, they will benefit from the limited liability protection which a company offers. Corporate failure is part of business and winding up an insolvent company is a corporate responsibility.

Creditors’ liquidations are more complex than they used to be. Arising out of recent company legislation, liquidators are obliged to report to the Office of the Director of Corporate Enforcement (ODCE) on the conduct of directors. If a company is insolvent it is vital that the directors and shareholders seek professional advice as early as they are aware of the impending corporate difficulties. Ignoring the problems is likely to result in their exacerbation rather than their alleviation.

In addition Horwath Bastow Charleton Limerick is experienced in dealing with personal insolvency assignments. The relevant guiding legislation is the Bankruptcy Act 1988.

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Features of our service

We have extensive experience of liquidations and receiverships and all forms of winding-up. We have a full support team of professionals in support of the receiver or liquidator – ensuring that the process is as efficient and orderly as possible.

We have experience of submitting reports (Section 56 Reports) to the ODCE. To date we have not been instructed to take proceedings to restrict directors.

We work with responsible company directors and company owners and we tidy up unsuccessful business ventures so the directors and shareholders can move on.

We undertake work for banks and other charge-holders in seeking recovery of their advances by realising the proceeds of the disposal of the assets charged. This is an unpleasant situation for the company and the financial institution. The receiver’s objective is always to get in and get out as soon as is reasonably possible and seeks to maximise the proceeds of the disposal of the charged assets. Hopefully, when the company has discharged its liabilities under the charge, there may be surplus funds. In some circumstances the company might survive the completion of the receiver’s work.

As receiver, the primary responsibility is to the charge-holder, but we are also very aware and committed to our responsibility to examine the wisdom of running the company in receivership and acting so as not to prejudice the chances of the company surviving after receivership.

We have an experienced team who are capable of turning a receivership around with speed, efficiency and value for money.

At Horwath we try to deal with personal insolvency in an informal way if possible. This means dealing with the insolvency outside of the realms of the High Court. Brian McEnery may act in the position of trustee to deal with the property of the insolvent individual and distribute it in an equitable manner to the creditors.

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Benefits to you

At Horwath Bastow Charleton Limerick we can help company directors and shareholders meet their obligations. We can advise on the feasibility of having solvent companies wound up or dormant companies struck-of voluntarily. We can assess whether examinership or some other form of corporate restructuring is feasible.

If not, as directors, you may wish to nominate Brian McEnery to act as liquidator; or, if you are a charge-holder, to act as a receiver on your behalf.

If you are a creditor or shareholder and not a director, you may be able to obtain the appointment of a liquidator in certain circumstances and, if so, you could probably nominate Brian McEnery as liquidator.

The essence of dealing with a personal insolvency is to avoid a “head in the sand” approach. The sharing of the burden of a personal insolvency with an experienced accountant is the start of road to recovery.

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