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 [including a body corporate or a partnership] becomes officially insolvent. The terms “liquidation” and “bankruptcy” will be well known to all.
What is not as well known is how these procedures fit into the fabric of our organised society 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 administration |
administrator |
| Company liquidation |
liquidator |
Company voluntary arrangement "CVA"
|
supervisor |
| Personal bankruptcy |
trustee |
Individual voluntary arrangement "IVA"
|
supervisor |
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 an ever increasing body of law handed down by court judgements as well as codes of conduct enforced by professional bodies who license practitioners to act in insolvency offices
In addition to the statutory forms of control over what is essentially 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:
-
Mediation
-
Early neutral evaluation
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Executive tribunal procedure
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Expert determination
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Arbitration
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Acting as expert witness, either solely for the court or for one of the parties
Adrian Leopard & Company aims to help remove some of the mystique from these complex procedures by providing a range of services from helping people to 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.