The following Restructuring & Insolvency guidance note Produced in partnership with Tim Carter of Stevens & Bolton LLP provides comprehensive and up to date legal information covering:
Whether a buyer is purchasing assets from a solvent seller, or a seller which is distressed or in a formal insolvency proceeding, will give rise to a variety of different legal and practical considerations for the parties involved.
The Insolvency Act 1986 (IA 1986) regulates various formal insolvency processes for both corporate entities and individuals. The principal corporate insolvency procedures in England and Wales are administration and liquidation:
if the company is in liquidation (whether compulsory or voluntary) and the appointed liquidator is not able to sell the business as a going concern, the liquidator will sell the assets of the insolvent company (as a job lot if possible, piecemeal if necessary) to maximise the funds available for distribution to creditors
when a company enters administration, the administrator takes over the control of the company's assets from the company's directors, in order to achieve one of the statutory purposes of administration (See Overview: Administration—overview). In some cases, the administrator will achieve the best value for the assets of a company by means of a pre-pack sale. A pre-pack sale is a transaction negotiated before the company's administration, that completes on or shortly after the administrator's appointment. A sale of this kind is appropriate where, for example, a going concern sale represents the best value for
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