Corporate insolvency or bankruptcy can be an extremely distressing process, which makes it vital that you seek expert legal advice.
Insolvency is different to bankruptcy. While insolvency can be a temporary condition when a business finds itself in a position where its cash flow is less than its debts, bankruptcy is an official declaration of an irretrievable financial state, with many legal ramifications.
Being insolvent does not necessarily mean a company must declare bankruptcy. However, if measures to tackle the company’s financial problems are not taken, then bankruptcy is often the inevitable outcome. To prevent a company’s financial problems reaching this stage, it is important to look at the cause of insolvency and explore ways to salvage the situation, from selling off assets to seeking acquisition by a larger company.
If a company does become insolvent, there are four main procedures that may be involved:
- Administration
- Company Voluntary Arrangement (CVA)
- Receivership
- Liquidation
At Pearson Rowe, we are experienced in advising in insolvency situations and can guide you on the correct course of action.
For more information on any of the high quality legal services provided by our insolvency law solicitors in Birmingham, please contact us.