Although their role differs slightly depending on the particular type of procedure, an insolvency practitioner’s basic duties are to realise company assets to the best of his/her capabilities for the benefit of creditors.Insolvency practitioners mainly work with insolvent individuals and companies and those who are struggling with their cash flow. The main obligation of an insolvency practitioner is to the creditors of the company or individual, regardless of any competing interests which may arise. As a result, in the case of a business they will endeavour to try and rescue it wherever possible.
Licensed insolvency practitioners are brought in to resolve complex situations. Company insolvency is complicated, and, therefore, insolvency practitioners act in accordance with the rules set out in Insolvency Law.
The challenges for an insolvency practitioner can vary depending on the situation, but can include:
• Dealing with and potentially directly running any type of business.
• Piecing together what went wrong in the company and reporting this to creditors.
• Taking steps to preserve jobs and rescue corporations where possible.
• Dealing with complex legal claims where there are parties whose actions contributed to the company insolvency.
• Acting as a negotiating intermediary between debtors and creditors to find suitable repayment solutions to avoid insolvency.
Before meeting with your insolvency practitioner, you should do a budget. This lists all your monthly income and spending. It will help you work out what spare income you have each month to pay your creditors.
An insolvency practitioner is much more valuable to your company the earlier you seek their advice. By contacting an insolvency practitioner during the initial stages of distress, you will be giving your company the very best chance of survival.
For more information on our Insolvency services please click here.