Trading with an insolvent company

Copyright © 2025 LexisNexis

Any creditor, supplier or customer will know that once a company is in financial difficulties, the chances of arrears being recovered reduce substantially. The degree to which this happens depends on many factors, including what sort of process the company is in, what security is in place for the creditor, what is the plan for the company going forward, and what is the market position of the company.

Trading with a distressed company

When a company is in financial difficulties, but not yet in a formal insolvency process, there are more options for a creditor and supplier to protect themselves on a subsequent insolvency. Through good communication with the company, continued support of the company may lead to a greater recovery of arrears and more secure terms going forward if negotiated properly. Creditors and suppliers should also tighten up their terms with any distressed company in order to reduce risk and maximise recovery. For more discussion on this and helpful guidance see Practice Note: A creditor’s guide to dealing with a company in financial difficulty.

Trading with a company in a formal insolvency process

Trading ...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Restructuring & Insolvency News

Construing the meaning of ‘premises’ in respect of a disputed winding-up petition (Odeon Arcade...

Restructuring & Insolvency analysis: In this case the court had to construe paragraph 3(1) of Schedule 6 to the Electricity Act 1989 (EA 1989) in connection with an application to restrain the advertisement of a winding-up petition. The court held that there was no justification for construing the word ‘premises’ within that paragraph to mean ‘the entire premises’. Consequently, the deemed contract (or contracts) that arise(s) under that paragraph of the EA 1989 must arise between the supplier and the party (or parties) using the supply. The ‘owner’ of the entire premises (here, there freeholder) would only be liable for the cost of the supply if the premises are unoccupied. This provides clarity to practitioners and property owners about the liability that arises automatically under the EA 1989, in particular in the context of premises divided up into multiple units—such as shopping centres (as was the case in this decision). Written by Isabel Petrie, barrister at Selborne Chambers.

Insolvency Service announces suspended sentence for Cheshire builder's pre-liquidation fraud

The Insolvency Service reports that Gary Roberts, director of GR Developments 1 Ltd, received a six-month suspended prison sentence for fraudulently removing property before company liquidation under section 206 of the Insolvency Act 1986. Roberts accepted £17,000 in customer payments and transferred £11,513 to his personal account while knowing the company was insolvent. Roberts received a two-year suspension period, 20 days of community rehabilitation, £1,000 of accrued costs, £154 surcharge and a ten-year director disqualification until February 2034.

Insolvency Service reports closure of pet supplies firm run by serial disqualified director

The Insolvency Service has announced the closure of Furrry Pet Group UK Ltd following a High Court order in Manchester. The company's sole director, Darren Anderson, was found to be operating while serving a 15-year directorship disqualification, his third such ban. The investigation revealed Anderson had used multiple aliases and failed to verify claims of £3.15m in assets. The company, previously known as The Holiday Travel Group Ltd until August 2024, did not provide requested accounting records, and investigators could not identify legitimate trading activity. The Official Receiver has been appointed as liquidator.

Restructuring and Insolvency weekly highlights—27 March 2025

This week's edition of Restructuring and Insolvency weekly highlights includes: key announcements from the Spring Statement 2025 of relevance to restructuring and insolvency practitioners, an analysis of a decision that a former auditor deliver up its audit files to liquidators (Dale v BDO LLP), the European Parliament's Committee on Economic and Monetary Affairs (ECON) opinion on the proposal for a directive harmonising certain aspects of insolvency law, plus a round-up of other news and cases for restructuring and insolvency professionals.

View Restructuring & Insolvency by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Statement of Insolvency Practice 16 (SIP 16)—pre-packaged sales in administration

Statement of Insolvency Practice 16 (SIP 16)—pre-packaged sales in administrationInsolvency practitioners (IPs) are required to comply with both legislation and Statements of Insolvency Practice (SIPs). SIPs are a series of guidance notes issued by the Joint Insolvency Committee, see Practice Note:

Licence to occupy property—letter format

Licence to occupy property—letter formatTo be typed on [Name of company in administration] Headed paper To:[Insert name(s) and address and company number (if relevant) of entity who you are granting the licence to occupy to] (the ‘Licensee’)Date [insert date]Dear [insert name of purchaser]Licence to

A company in voluntary liquidation owns assets charged to a lender and subject to a registered charge.

A company in voluntary liquidation owns assets charged to a lender and subject to a registered charge. Can the liquidators sell the charged assets without the lender’s consent?The powers of the liquidator are set out in Schedule 4, Part III of the Insolvency Act 1986 (IA 1986). The liquidator’s

Corporate Insolvency and Governance Act 2020—restrictions on ipso facto clauses

Corporate Insolvency and Governance Act 2020—restrictions on ipso facto clausesBackground to the Corporate Insolvency and Governance Act 2020 (CIGA 2020)Spurred on by the coronavirus (COVID-19) pandemic and a desire to mitigate the effect on businesses of the government-imposed lockdown, the
Statement of Insolvency Practice 16 (SIP 16)—pre-packaged sales in administration

Statement of Insolvency Practice 16 (SIP 16)—pre-packaged sales in administration

Statement of Insolvency Practice 16 (SIP 16)—pre-packaged sales in administrationInsolvency practitioners (IPs) are required to comply with both legislation and Statements of Insolvency Practice (SIPs). SIPs are a series of guidance notes issued by the Joint Insolvency Committee, see Practice Note: