Restructuring and insolvency

The insolvency procedures outlined in this Overview are:

1. •

   liquidation—the process of concluding or winding up the affairs of a company prior to its dissolution. There are two distinct types of liquidations: one that applies to companies that are insolvent (ie where a company's liabilities exceed its assets or it is unable to pay its debts as they fall due), also known as a creditors’ voluntary liquidation or a CVL and another for companies that are solvent also known as a members’ voluntary liquidation or MVL. Some legislation refers to a company being 'wound up' rather than 'liquidated', but there is no practical difference between these terms

2. •

   administration—unlike other insolvency procedures, it is intended as a temporary state of affairs to facilitate the survival of the business of the company concerned and, if the rescue of the company as a going concern is not possible, the administrator seeks to achieve a higher value for the company’s assets on behalf of the creditors as a whole than would be possible by proceeding straight to winding up

3. •

   fixed charge/Law of Property Act (LPA) receivership—a fixed charge receiver is