G&K For advice on insolvency issues call us on your local number opposite www.griffinandking.co.uk | email: janet.peacock@griffinandking.co.uk See us on: G&K MY LIQUIDATION JOURNEY – BY FIRST CLASS INSOLVENCY TEAM By AM After 3 years of difficult trading the position of my company had become untenable and personally onerous, so I decided the only realistic route was to seek the services of an insolvency practitioner. A quick online search came up with Griffin & King, so I put in an initial query. I was quickly contacted by Janet Peacock who remained my primary contact throughout the process. At the first phone call she quickly and efficiently elicited the salient points regarding the company’s position from me, and I was instantly impressed by her no nonsense and non- judgemental approach. She recognised the key issues, and said she needed to consult with the liquidator to come up with a succinct proposal. Within a couple of hours she was able to do precisely that, providing a clear route forward, itemising what I would have to do, what I shouldn’t do and giving cheerful, practical advice that provided a clear roadmap going forwards. This was precisely what I needed at the time; whereas before that had appeared to be an insoluble mess there was now a clear set of procedures, processes and information required. We met a couple of weeks later, with me providing her with the necessary information, and her providing me with a mixture of good hearted support, paperwork to be signed and, for the first time in a long time, absolute clarity on the route forward. A few weeks later there was the creditors meeting; where again I was steered through the practicalities, formalities and approach. Janet has, throughout, been supportive, swift to respond to any queries, understanding and always clearly expressed advice, coupled with understanding of what I could practically achieve, coupled with acceptance and a positive light with anything I could not. What could have been stressful, costly to me personally, and a tangled mess has been resolved to a number of clear, achievable steps; for which I am both impressed and grateful. G&K WRONGFUL TRADE. WHAT SHOULD DIRECTORS DO TO AVOID PERSONAL LIABILITY? A Director of a company that is wound up because it is insolvent can be made personally liable for the debts of the company, if there has been ‘wrongful trading’. There has been wrongful trading if, at some time beforehand, a director knew (or ‘ought reasonably to have concluded’) that there was no reasonable prospect of avoiding the insolvent company winding up, but did not take ‘every step’ to minimise the potential loss to the company’s creditors. The aim of the wrongful trading laws is to make directors of companies that are getting into financial trouble, who might otherwise try to trade out of trouble, stop and think carefully about whether they are being overly optimistic about the company’s prospects. So, if a company director is concerned that his company is insolvent, what steps can he take to minimise any risk? • Ensure he always have adequate and timely financial information. • Be alert to danger signs, such as pressure from creditors. • Draw conclusions from the circumstances that a reasonably prudent business person would have drawn. • Hold regular board meetings to discuss/review the company’s situation. • Ensure he considers the interests of creditors as well as comply with his statutory director’s duties. • If there is a prospect of insolvency, do not incur new liabilities as if there was nothing wrong. • Record conclusions. • Consider stopping trading and starting appropriate insolvency proceedings before creditors do. • BUT MOST OF ALL - Take specialist, professional advice, consider it carefully and follow it unless there are very good reasons not to.