Insolvency law

Insolvency is rarely a single moment. It is a slow narrowing of options in which each decision — pay this supplier and not that one, take the short-term loan, keep trading through one more quarter — is reasonable on its own and, seen afterwards, forms a pattern. That afterwards matters, because once proceedings open, transactions from the preceding months can be reopened and directors can be asked why they continued.

Insolvency law governs what happens when a business cannot meet its obligations, and it addresses debtors and creditors from opposite sides of the same facts:

• the rules on when a business is considered unable to pay, and on the duty to act once it is;
• the rules on a director’s obligations in the approach to insolvency, and on personal exposure;
• the rules on which transactions can be set aside because of when they were made;
• the rules on the opening of proceedings, on who may request it, and on the appointment and powers of an administrator or liquidator;
• the rules on lodging a claim, proving it, and the deadlines that extinguish it;
• the rules on ranking — who is paid before whom, and what security is actually worth;
• the rules on ongoing contracts, and on whether they survive the opening of proceedings;
• the rules on employees, their claims and the guarantees that stand behind them;
• the rules on closure, discharge and what a debtor is released from at the end.

Our lawyers can support you in all these areas of law.