The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:
Buying the business and/or assets of a company from an insolvency practitioner (insolvent sale) is quite different from buying the business and/or assets of a company which is solvent (and is therefore purchased from the owners of the company in the usual way). While this note generally refers to a purchase of a business and assets from an insolvency practitioner, many points also apply to the purchase of shares from an insolvency practitioner. For more information on the office-holder's point of view see Checklist: Sale of business as a going concern—checklist of information and Trading a company in administration—the office-holder's point of view.
Headline points to note which differentiate an insolvent sale from a solvent sale are that:
the insolvency practitioner’s solicitors produce the first draft of the sale agreement, rather than the buyer
it is very unlikely that any representations or warranties are given, and any given would be very limited
the statutory terms and conditions for the protection of a buyer implied by the Unfair Contract Terms Act 1977 (UCTA 1977) will be explicitly excluded
usually no title guarantee is given
the buyer usually takes the assets (or shares) subject to any defect in title or encumbrances that may exist
the buyer often indemnifies the seller and the insolvency practitioner in respect of claims concerning the business and assets
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