Jameson Smith & Co Ltd

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Thursday 14 June 2012

How Insolvency Practitioners Can Help

An insolvency practitioner is necessary if you have a business that is struggling financially and you need to either liquidate it or find some way of helping it to trade on through some sort of statutory payment structure like a company voluntary arrangement.

Generally, directors will visit their accountant as their first port of call when the warning signs are apparent. Normally the accountant will admit that the advice required is outside of their area of expertise and they will automatically refer the client through to a local insolvency practitioner.

In most cases this can be the last thing that the director actually wants without even knowing it. The problem arises when the director seeks advice on how to handle the commercial or personal implications of an insolvency solution such as liquidation or a company voluntary arrangement.

Once engaged, an insolvency practitioner acts in the best interests of the creditors (people/businesses that the director's company owes money to). Naturally, the director may feel like he is getting a raw deal here as what he really wanted is someone to help him personally get out of this sticky situation with minimal complications or implication to them directly.

Unfortunately, insolvency often brings with it all manner of areas that need addressing properly and carefully and while the insolvency practitioner will make sure that the creditors interests are looked after and everything is done as it should, the director may be left feeling a bit lonely and vulnerable as they have no one guiding and protecting them personally throughout the entire process.

Director protection is where we come in. We work closely with the insolvency practitioners and the directors to make sure that successful communication between both parties and congruency is at the forefront of our work.

Creditors can sometimes get a bit aggressive and in some cases they may have good reason as they may be owed a great deal of money and directors may have neglected communication, possibly through fear of what the creditors may say. The insolvency practitioners will not be looking to step in between the directors and the creditors and Jameson Smith & Co effectively act as a barrier between the directors and the creditors controlling all communication between the two sides.

While we protect the directors it leaves the insolvency practitioners to process the insolvency documents and court procedures, communicating with us all the time so we manage the situation from start to finish.