Moratorium

On 28 June 2020, legislation was introduced which enables a company to  obtain a 21 day Court Order for a Moratorium which can be extended for up to one year. The Moratorium has the effect of stopping any of the Company's creditors from taking adverse legal action, for the company to continue to trade, pay liabilities arising in the moratorium period & establish a solution which will result in the full payment of its creditors; or it entering into a Company Voluntary Arrangement. 

The benefits of this process are massive, since the Company's management remain in control of day to day trading & the Insolvency Practitioner (IP) acts as a Monitor, making sure that the company is looking to achieve a suitable exit whilst protecting the rights of the creditors, subject to the Moratorium.

There is a strict criteria to to apply for a Moratorium & some creditors are excluded automatically by the legislation. It is not intended that the process is a prelude to a company entering Administration or other insolvency proceedings. It has been introduced to provide short term breathing space for resolvable difficulties.  

This new legislation reflects the offering in the USA known as Chapter 11 & it will be worth watching to see how broadly this is applied & how many successful outcomes are achieved. 

If you wish to explore the viability of a Moratorium for your business, call us now. 

Administration 

The Administration process is a the most powerful & flexible instrument in an IP's toolbox & can result in a company being: 

✔   Saved as a whole or part whilst maintaining existing ownership; or 
✔   Marketed & sold to new owners, who buy the assets in whole or part; or 
✔   Cause a better return to creditors than would have been achieved in closing via a liquidation process. 
✔   Provide a platform from which the company can take a breath, restructure & build an exit route to cause its               survival. 

Leading up to Administration, a company can be protected by a legal Moratorium, which stops all legal proceedings & debt recovery pressures, allowing time for a proper rescue solution to be built & started. Up until the 2020 pandemic, it was exceptional for an Administrator to use their rights to defer elements of their powers to directors & or management in the day to day trading, whilst the Administrator uses their expertise to address the historic & wider issues in the business which cripples its profitability; such as reducing the fixed overheads, ending onerous leases, closing branches previously considered too expensive to close because of exit costs. However, we now see such actions in large retail administrations of Debenhams & Laura Ashley. Whilst these are massive operations, the same legislation that is applied to multi million/billion £ companies are applicable to all businesses, even those with turnover sub £1m. Our industry will tell you the number of zeros in turnover does not change how we apply the law, it’s just more zeros on the end & more resource applied. 

The Administration process can be incepted by the company, its directors, a creditor, or by a Court Order. At Harveys, we are experienced in advising upon & managing the Administration process for our clients. We have a proven track record of delivering significantly better results for creditors than would have been achievable in liquidation, saving businesses & jobs. 

Our experience in driving businesses through the Administration process will benefit the outcome for your company & we will always strive to find the best possible solution for everyone involved. Whilst Administration is generally the most expensive process, please rest assured that, no matter what, our recommendations and an affordable fee structure will be agreed with you.

Call us now for a free initial consultation to establish the right solution for you.

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I just need some time to sort out this unexpected problem & we can get back on our feet!  

If you are in a position where you could pay your creditors if given some time, a CVA might be the right solution for you. 


Contact us to find out more


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Company Voluntary Arrangement (CVA)

A CVA is an agreement between the company & its creditors to allow the company time to repay all or part of its liabilities over a specified period of time. The company prepares a proposal to its creditors of its best possible offer to settle its liabilities. This may involve it repaying the debts from future profits &/or in having time to sell assets to pay its liabilities. A full and proper financial disclosure is made & supported by a detailed cashflow for at least the following 12 month period or the term of the CVA. Creditors are sought to vote on the acceptance of the proposal, its modification or rejection. For a CVA to be agreed 75% or more of voting creditors have to be in agreement of its acceptance. The return to creditors must be better than would be achieved in liquidation. The CVA allows for the company to continue to trade, maintain its management & ownership structure & treat its assets & creditors as stated by its (modified) proposal. 

Once a CVA is incepted, creditors with sums outstanding at the time of the CVA’s approval will be bound by its terms & unable to take enforcement action against the company, therein allowing the company to focus its energy on returning to profitable trading.

CVA is also a useful tool to ring fence specific types of creditors, such as landlord's debts in multiple locations, who are problematic to the future trading of a business. 

Harveys will work with you to understand your company’s financial & overall trading position to establish the level of your liabilities & set a repayment schedule at a level that you can afford to pay. It is expected that the Company's liabilities will be paid in full &, where this is not possible, the CVA &  contributions from income will  be  maintained for 5 years. We have a strong working knowledge of numerous larger creditors' policies in their voting patterns on CVAs. 

To find out if a CVA is right for your company get in touch with Harveys today, our dedicated team are always on hand to help you.

Refinancing

Refinancing your business assets can be a great way to improve your cashflow. Companies use refinancing during key growth periods, to purchase new machinery, during a downturns or seasonal adjustment, or when they may be under pressure from creditors or clients because of over trading/under capitalisation. Clients tend to contact us when they are under significant financial pressure & we use our specialist skills to independently assess the position, the need, the impact & risks of obtaining funding & what type of funding is right for you. 

We will, in conjunction with the right lender or broker, work with you to achieve your funding goals. Let us help you get your business back on track. 

To find out how, please get in touch with us today.

Receivers & Law of Property Act Receivers (LPA)

The Administrative Receiver, or a Receiver, or a Law of Property Act (LPA) Receiver does not necessarily rescue a company, but instead works towards repaying the secured liabilities. The use of the process is available, but its use quickly declined from 2003 when the Enterprise Act introduced new Administration provisions, which have proved to be more flexible & powerful.   An IP is generally appointed by a secured creditor holding a suitable charge against the company & its assets. This Receiver will oversee the process of reclaiming & selling the assets owned by a company to repay the charge. 


LPA Receivers are still frequently appointed to deal with property where secured commercial lending has been advanced & is in default. LPA Receivers are empowered to trade at the property by the debenture under which funds were advanced & can be found not only disposing of commercial properties, but running bars, restaurants, hotels & clubs with a view to selling an operational business along with the long lease or freehold premise s.


Our insolvency experts have the skills & experience of dealing with all these processes & if you believe you are in need of these services then do not hesitate to get in touch with us & take the first step in resolving the liability.

Time To Pay Arrangements

Agreeing informal Time to Pay arrangements (T2P) with your creditors is now common place and more prevalent following the pandemic.


Special legislation was introduced during the pandemic to deal with landlord debt.  HMRC approach is now unrecognisable from their long standing past actions.


Many trade creditors have always agreed T2P, since they wish to recover the whole of their debt & in many situation maintain your future business &  their future income. The Court system also applies T2P in CCJs & actively seeks a settlement rather than the destruction of a business by a single debt where it can be avoided. 


We can act on behalf of a limited company, partnership or sole trader in achieving a T2P:   contact us now to benefit from our  working knowledge of HMRC's current & historic approach to T2Ps. 

Have you fallen behind with your PAYE/NIC or VAT?


Accrued a Landlord debt during the pandemic?




Have a CCJ or debt you simply need time to pay?


 

Let us help you negotiate with your creditors.

HMRC Time To Pay Arrangements 

HMRC see PAYE, NIC & VAT as their money that your business has spent, you have collected the tax on their behalf, but not paid it over; whereas Corporation Tax (CT) or Self-Assessment Tax from partnership or sole trading (SA) is your tax liability & is approached by them differently. 


T2P with the HMRC generally allow you a specific but limited term of time with regular & equal monthly payments to settle arrears of PAYE, NIC & VAT, but only whilst maintaining current & new debt incurred. 


When asking for a T2P, you are also expected to have or immediately bring all returns & submissions up to date where they are in arrears, it can impact achieving a successful T2P. At Harveys, we maintain an ongoing working knowledge of HMRC’s current & historic policies which will benefit you in obtaining a T2P. 

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Time to Pay Arrangements For CCJs, Trade, Commercial or Personal Debt

Did you answer yes to any or all of these points? 


Then you need our help!



We know the tools all creditors have at their disposal & what are the pitfalls. With some trade creditors, we are even aware of their policies or strategies & the measures they have taken or are prepared to go to in recovering outstanding monies. 


You can benefit from our knowledge & instruct us to negotiate a T2P arrangement on your behalf.  In this action, a message is also communicated that your instruction of an insolvency professional shows you are taking their threats seriously.


Call us now to help you achieve a T2P arrangement. 

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Do you have a single debt which is like a noose around the neck of your business or life?

Is a creditor just being really difficult & stopping you from focusing on your core business? 

Given time, could you pay the single creditor off, if they would just let you get on with it?