When we hear the words Insolvency, Administration and Liquidation, many people’s first thoughts are of the employees facing the possibility of redundancy.
We’re aware losing your job has a fundamental effect on finances, but it can have a massive effect on health due to the stress it can bring. Immediate thoughts often include “how do I tell the family” or “how are the bills going to get paid next month.”. Unfortunately, gone are the days where you can simply walk out of one job and straight into another.
While a lot of people think company directors just liquidate a company and walk away without any thought of the consequences, in many instances, I have to disagree. The term COMPANY DIRECTOR is simply not just a title that means they get the big office. With this title comes a lot of responsibility including being able to keep their employees in work.
The health of the directors may have also suffered due to months of stress. Many steps have often been taken, there will have been numerous meetings and conversations taking place with fellow board members. The bank manager in an effort to extend loans and overdraft facilities, reducing prices in the hope of securing contracts for work and in some cases, raising funds through personal assets. All in the hope of preventing themselves being in the position of standing in front of their workforce and having to say the dreaded word “REDUNDANCY”.
For any director to come to the conclusion the only option left available to them is that of insolvency, I can assure you reaching this decision will not have been as easy as some people may think.
By: Jo Riley – Wilson Field