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Restructuring and Insolvency law addresses the financial difficulties faced by businesses and individuals, helping them navigate debt problems, negotiate with creditors, and if necessary, manage the process of liquidation or administration. In Leicester, as elsewhere in England and Wales, these matters are governed by national legislation but often involve local courts and professionals. The city has a vibrant business community, which means expertise in restructuring and insolvency is in consistent demand, both for large companies and small businesses, as well as individuals facing personal insolvency.
There are several scenarios where seeking legal assistance is crucial in restructuring and insolvency matters. Some common situations include:
A specialist solicitor can clarify your options, help fulfil legal obligations, handle negotiations, and represent your interests in court or with creditors.
The legal framework for restructuring and insolvency in Leicester is primarily set out by national laws such as the Insolvency Act 1986, the Companies Act 2006, and related rules and regulations. Key aspects relevant to Leicester include:
It is important to seek advice specific to your circumstances and location, especially as timing and local practice can significantly affect outcomes.
Restructuring refers to the process of reorganising a company’s financial or operational structures to avoid insolvency. Insolvency is the state where an individual or company cannot pay their debts as they fall due, and may need to undertake formal insolvency procedures.
A business is generally considered insolvent if it cannot pay debts when they are due, or if its liabilities exceed its assets. There are specific legal tests for insolvency, so it is wise to consult an insolvency specialist.
Liquidation is the winding up of a company’s affairs, selling off assets to pay creditors. This can be voluntary (initiated by shareholders or directors) or compulsory (ordered by a court upon creditor petition).
An IVA is a formal agreement between an individual and their creditors to pay back debts over time, usually with reduced payments. It is arranged and supervised by a licensed insolvency practitioner.
Bankruptcy is not the only solution. Options like IVAs or Debt Relief Orders may be preferable, depending on your circumstances. A lawyer or insolvency practitioner can advise on alternatives.
Company directors can become personally liable if found guilty of wrongful or fraudulent trading, or if they breach duties owed to creditors during insolvency. Proper legal advice is essential for directors.
Not always. Procedures like administration and CVAs are designed to help save viable businesses and jobs. Options depend on the business’s finances, structure, and prospects.
Employees have certain statutory rights in insolvency, such as redundancy pay and claims for unpaid wages. The position depends on the type of insolvency process being followed.
Once a formal insolvency procedure is underway, there are usually legal restrictions on creditor actions, such as a moratorium on enforcement or court proceedings.
Most matters are dealt with at the Leicester County Court or the Birmingham District Registry of the High Court for larger corporate cases. Your solicitor will advise on the specific venue for your situation.
If you are seeking further information or assistance, the following resources may be helpful:
If you are facing financial distress, considering restructuring, or have received notice of insolvency proceedings, it is important to take action promptly. Your next steps should be:
Taking early legal advice is vital in managing risks, protecting your interests, and potentially preserving your business or achieving the best possible outcome in difficult circumstances.
