What is insolvency?
Insolvency in simple terms means that a company or person has gone bust. That is to say that their liabilities exceed their assets or they cannot meet the claims of their creditors as they fall due.
The law, currently The Insolvency Act 1986 as amended, provides for special procedures to come into play when a person [or a corporate body or a partnership] becomes officially insolvent. The terms “liquidation” and “bankruptcy” will be well known to all.
What is not well known is how these procedures work and, more particularly the very far reaching consequences that these procedures can have on society at large, not just the person who has gone bust.
In English law there are several insolvency procedures and these are as follows, together with the official title of the practitioner who takes office to administer the case:
|Company voluntary arrangement (CVA)
|Individual voluntary arrangement (IVA)
Some of these procedures are operated through the court and some are operated on a less formal basis but they are all governed by stringent and extensive legislation, and a body of law handed down by court judgements as well as codes of conduct enforced by professional bodies who licence practitioners to act in insolvency offices
In addition to the statutory forms of control over bad debt, there are other less formal procedures or alternative forms of dispute resolution. These can include informal creditor payment plans and a variety of procedures including but not limited to:
Early neutral evaluation
Executive tribunal procedure
Acting as expert witness, either solely for the court or for one of the parties
Adrian Leopard & Company helps remove some of the confusion from these complex procedures by providing a range of services from helping people understand the problems they may be facing to acting in disputes, either for clients or in a mediatorial or arbitral role. We can also take formal insolvency appointments.