INSOLVENCY

INSOLVENCY

Procedures that aim to rescue the company (Corporate Rescue)
1. Administration
  1. Purposes ( S. 8 together with para 3(1) of Sch B1, IA 1986
    1. OBJ I : RESCUE THE COMPANY AS A GOING CONCERN
      1. Administration may save the company itself, but in practice this is unusual
    2. OBJ II : ACHIEVE A BETTER RESULT FOR THE COMPANY'S CREDITORS AS A WHOLE THAN WOULD BE LIKELY IF THE COMPANY WERE WOUND UP
      1. more commonly obtained with the business saved by the administrator selling off the business to a purchaser but the company itself being wound up
    3. OBJ III : REALIZING THE PROPERTY IN ORDER TO MAKE A DISTRIBUTION TO ONE OR MORE SECURED FOR PREFERENTIAL CREDITORS
2. Company Voluntary Arrangement (CVA)
  1. Standard CVA with no moratorium
  2. CVA with moratorium for small companies
Procedure that allows secured creditors to recover monies owned
1. Receivership
  1. a mechanism by which a secured creditor can recover money owed by a company
Procedure that brings the company to an end
1. Liquidation (Winding up)
  1. Compulsory Winding Up
  2. Voluntary Winding Up
    1. Members' Winding Up
    2. Creditors' Winding Up
    3. Liquidation's Committee
  3. On Ground of Public Interest
    1. Petitions presented by the Secretary of State
  4. Powers of a LIQUIDATOR (Sch 4, IA 1986)
    1. The ability to pay any creditors in full
    2. The power to bring or defend legal proceedings on behalf of the company
    3. The power to carry on the running of the business in order to achieve a more beneficial winding up
    4. The power to sell any of the company's property
Avoidance of transactions entered into prior to the liquidation
1. Transactions at an undervalue s238
2. Voidable Preferences s239
3. Extortionate Credit Transactions s244
4. Avoidance of floating charges s245
The personal liability of directors under INSOLVENCY ACT 1986
1. Fraudulent Trading s213
2. Wrongful Trading s214
  1. Re Produce Marketing Consortium Ltd [1989]
  2. Re Hawkes Hill Publishing Co Ltd [2007]
3. Misfeasance Proceedings s212

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	Created by Nadzeera Afiqah almost 9 years ago