Business Notes - insolvency
- Created by: jutnut
- Created on: 23-08-18 16:23
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Insolvency
Options for a company:
- Informal arrangements with their Creditors
Pros:
- No court proceedings
- Cheap
- More time to pay
Cons:
- Non-enforceable
- Creditors don't have to agree
- No moratorium
- Not Binding
- Company Voluntary Arrangement: (s.1-7 IA)
Pros:
- Formal
- Can be proposed before insolvency
- Can bind the minority of creditors (only require Majority (75%)
- Cheap
Cons:
- Preferential and secured creditors not bound without consent
- No automatic Moratorium (can get around this by being insolvent first)
- Administration
Pros:
- Main aim is survival of the company
- secondary aim is to get best outcome for creditors
- Interim/auto moratorium
- Continue trading to…
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