Having commenced formal insolvency proceedings, what should Directors do next?
This is often the most difficult time for Directors’ and that is why we advise using Solicitors experienced in corporate insolvency to ensure that the Liquidator or Administrator is in office as soon as possible. The period between the instructions to commence insolvency proceedings and the appointment of the Liquidator or Administrator should be viewed as a kind of limbo. The Directors have full executive powers but must avoid fraudulent acts which often take place at this time unwittingly. Each case will have its own special circumstances and should be fully discussed prior to the conclusion of the consultation. Common problems will include the following:- Payment of wages and salaries, Payments to existing creditors, Ordering of goods and services, Sales of Assets, Continuation of ongoing contracts, Bank transactions, Notification to third parties – bank, suppliers etc, etc.
