Company bankruptcy is a term commonly used when referring to a company becoming insolvent. A bankrupt company means that it has insufficient cash to pay its bills, or the value of its assets is less than its total liabilities. In the UK, the term bankruptcy is only applicable to individuals, including sole traders and members of partnerships. 

How do I know if my company is insolvent? 

Defined by section 123 of The Insolvency Act 1986, there are two ways of determining if your company is insolvent and bankrupt: 

• Cash flow insolvency 
  When a company is unable to pay its debts as they fall due. 
• Balance sheet insolvency 
  The liabilities on the balance sheet outweigh the assets. 

Liabilities resulting from legal action, including County Court Judgements (CCJs), that remain unpaid are another indication of insolvency. 

How we can help you close your bankrupt company? 

If your company is struggling financially and you want to close it, we can help by carrying out the formal liquidation procedures below to close your insolvent company.  

• Close your company down via a Creditors Voluntary Liquidation (CVL)
  A CVL is a liquidation procedure for companies that are insolvent. The process will formally close and liquidate your company, ceasing its trading operations, realising any assets and removing the threat of creditor legal action. If your company has employees, they can claim for redundancy and other statutory entitlements through the government’s Redundancy Payment Service (RPS). The process is final and irreversible. Once completed your company’s unsecured debt will be written off and the company is dissolved, allowing you, the director to move on.
  Find out more about Creditors Voluntary Liquidation
• Close your company down and start again via a pre-pack liquidation
  A Pre-Pack liquidation is a type of CVL where the sale of your company’s assets is arranged before liquidation, allowing business operations to continue seamlessly under the purchasing company. The company name may be reused, and employees can transfer under TUPE. Contracts and essential agreements can also be included as part of a sale, ensuring minimal disruption to your business operations. This process eliminates the unsecured debts of your previous company, providing a fresh start free from previous unsecured liabilities.
  Find out more about Pre-pack Liquidation

How we can help rescue your bankrupt company? 

If your company is insolvent but the business still has the potential to repay its debts, we can carry out the below formal processes to help restructure your company or establish a payment plan. 

• Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA) 
  A CVA is a payment plan between a company and its creditors that allows you to restructure your company’s unsecured debts, while continuing to trade, by making affordable monthly payments over a fixed period. We start by assessing your company’s financial position, determining a realistic repayment amount. These terms are then proposed to your creditors and if approved, your company enters the repayment plan. When in place, all interest and charges are dropped and creditors in the arrangement cannot take further legal action. The process lasts for up to 5 years and on successful completion, any remaining unsecured debt in the arrangement is written off.
  Find out more about Company Voluntary Arrangements
• Restructure your company through administration  
  Administration is an insolvency procedure for companies that are insolvent. Entering the procedure, your company will be in a temporary state of protection by a moratorium, that halts creditor action, including legal proceedings, giving your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner more profitable organisation. If rescuing the company isn’t a viable option we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
  Find out more about Administration

Personal bankruptcy

Personal bankruptcy is a process for individuals who owe at least £5,000 and cannot afford to repay their creditors. Bankruptcy offers no protection to personal assets, meaning assets such as a house or a car could be sold in order to repay creditors.  

How to get in touch with us: The next steps 

1. Speak with our initial advisers 
   Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation.  
2. Initial assessment 
   During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems 
3. Formally engage with Wilson Field 
   If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.  

In summary

In the UK, bankruptcy is only applicable to individuals. Company bankruptcy is a term referring to a company which is insolvent. If your company is insolvent, there are various insolvency procedures which your company can enter, whether you want to try and rescue the company, or formally close and liquidate it. 
  

Case Studies

Oldham Precision

Kelly Burton • Construction & Engineering • Administration

Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.

The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.

Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.

Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.

After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.

Kelly Burton, director in the Leeds office at Wilson Field said;

“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.

“The new company will be under the same management offering the same standards of service to its customers.”

Print On Solutions Limited

Kelly Burton • Service Agency • Administration

A Leeds print company has been bought out of administration saving all 54 jobs.

Print On Solutions Limited was set up in 1999 years ago and went from start-up business to the largest envelope overprinter in the UK with offices in Leeds and Bury, 12 litho presses and six digital presses.

Administrators Kelly Burton and Joanne Wright from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 11 April after the company, based in Century House, Holbeck, ran into financial difficulties following an ongoing dispute relating to a significant contract.

The directors took early advice and the business was sold to new company WEPOS Limited as a going concern saving all 54 employees’ jobs.

Kelly Burton from Wilson Field said:

“Following discussions with the directors, the business was sold to WEPOS Limited as a going concern, safeguarding all 54 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team.”

In 2003 Print On expanded by moving to a 12,000 sq ft, purpose-built factory in Leeds, designed to offer the business a state-of-the-art platform for growth.

The expansion of the group was through strategic acquisitions and mergers of envelope manufacturers. Tower Envelopes in Bury merged with Print On in 2010 and became the Lancashire division.

K2 Technologies Ltd and K2 Thermal Imaging Ltd

Kelly Burton • Service Agency • Administration

Wilson Field has helped secure the sale of two related North East businesses, which developed and manufactured thermal imaging equipment, as a going concern to Cenergem Limited backed by a group of local investors not associated with the current management.

Kelly Burton and Joanne Wright from Sheffield-based insolvency specialists Wilson Field were appointed joint administrators of Darlington-based K2 Technologies Ltd and K2 Thermal Imaging Ltd on 25 July 2016.

The two companies had experienced cash flow problems following to a sharp decline in the demand for their products due to increased global competition in the market over the last 18 months.

The sale, which resulted in six of the current eight jobs being saved, was achieved by Wilson Field, working alongside valuers and asset management consultants Charterfields, who handled a number of inquiries and Mark Wilkinson, insolvency partner at Shulmans Solicitors in Leeds.

Kelly Burton, director and licensed insolvency practitioner at Wilson Field said:

“During the past 12 to 18 months K2 had begun to experience increased competition in the market. Competitors had started to manufacture and sell similar products at a lower price, meaning the company had seen a sharp decline in the demand of products and a resultant shortage of cash flow.

“Our job was to realise a sale of K2 as a going concern to achieve the best return for the company’s creditors. There was significant interest by a number of parties. The resultant sale has also saved six of the eight jobs.”

K2 Thermal Imaging Ltd and its predecessors were involved in the development of three products establishing the company as a lead pioneer in thermal imaging.

The company designed and engineered three main product ranges for extensive use in the marine, firefighting and industrial sectors, allowing operators to enter smoke-filled environments to detect and rescue people with a hands-free application, therefore improving success rates in recovery.

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