Leathes Prior is well known for its niche insolvency practice and is one of only a handful of law firms in the east of England that has lawyers dedicating all of their time to insolvency law and practice.

The Insolvency team is headed by Frank Brumby who is one of only two solicitors in the East of England who is a Licensed Insolvency Practitioner. Frank is also a full member of R3, (the Association of Business Recovery Professionals), the Insolvency Lawyers Association, and co-author of “Managing Bankruptcy and Liquidation”, published by The Stationery Office.

Advice to Directors

Whilst nearly all companies have the benefit of limited liability, the protection for directors and shareholders is often compromised by the giving of personal guarantees and/or granting of security on personal assets (often the director’s home) to banks, finance companies, and sometimes key suppliers.

Leathes Prior can assist the director by advising on the potential liability of the director and, as appropriate, with disputing or negotiating with the creditor concerned, which may lead to a substantial reduction in the director’s liability. Alternatively we can advise the director on the personal insolvency procedures available to him. For more details click here

If a company is placed into liquidation, the Liquidator is statutorily obliged to investigate the conduct of the Director whilst he was managing the company’s business and if it is found that the director’s conduct falls below what is reasonably expected of him, the Director may find himself subject to:

• Director’s Disqualification Orders and Undertakings where the director may be prevented from acting as a director of a company in the future for between 2 and 15 years
• Wrongful trading where the director may be held liable to pay, from his personal financial resources, some or all the debts of the company
• Fraudulent trading where the director may be held liable to pay some or all of the debts of the company and may face imprisonment for up to 7 years
• Misfeasance where the director has breached his fiduciary duties to the Company
• Preference transactions where creditors of the company (including the director) have been preferred by the company to the detriment of other creditors. Did you know, for example, that if the company is insolvent and a director pays any monies into an overdrawn bank account, which facility the director has personally guaranteed, then the director may be held personally liable for the that sum as a preference transaction! A director may also be disqualified for such conduct.
• Transactions at undervalue where assets of the company have been purchased from the company by the director or his family at any time in the period of two years prior to the liquidation of the company

Directors should therefore seek advice as soon as possible to minimise their potential liability.

Advice to Companies

Whether the company is being pursued by one or more creditors who have served a statutory demand, or presented a winding up petition, or where there is general creditor pressure, Leathes Prior can advise the company and directors on various formal and informal procedures to alleviate creditor pressure including:

• Informal arrangements with creditors
• Company Voluntary Arrangements
• Administrations
• Receiverships
• Voluntary and Compulsory liquidation

Advice to Office-Holders

Leathes Prior advises many Licensed Insolvency Practitioners, both locally and nationally, who accept appointments as:

• Liquidator
• Trustee in Bankruptcy
• Supervisor
• Administrator and
• Receiver.

Leathes Prior has advised upon all aspects and legal problems faced by Insolvency Practitioners including (amongst other things):

• Insolvency Act and Insolvency Rules Procedure
• Validity of appointment of office holders and their powers
• Voidable and antecedent transactions
• ROT claims and creditor’s rights
• Validity of fixed and floating charges and securities
• Wrongful and fraudulent trading
• Company and Individual Voluntary Arrangements
• Creditor’s meeting
• Proofs of Debt
• Misfeasance
• Administration Orders
• European Legislation

At Leathes Prior we recognise that Office holders may not be in funds to finance litigation and therefore have no difficulty in acting on formal or informal conditional fee agreements, with or without the benefit of after the event insurance protection.

Contact
In the event that you have any enquiries, then please contact either Frank Brumby or Sue Sutton or Adam McCaw or alternatively please call us on 01603 610911.

Meet the Team