Decisions delayed due to personal liabilities arising
It is never easy for a director to make the decision that their Company needs to enter a formal insolvency process. This is all the more so if it is going to lead to a personal financial claim; usually personal guarantees or overdrawn loan accounts.
The director of course should not be bringing this into account in coming to their decision, but it inevitably does have a major bearing on when or whether they agree to proceed into liquidation.
Particularly with the changes in the disqualification regime, it is unwise for directors of failing companies to simply struggle on without hope, but how can you give them the confidence to make the right decision. You know it is inevitable, but the director will delay if they do not have a sensible plan to address any personal issues that will arise.
PGUK’s Director Liability Review offers the director the opportunity to obtain independent advice on their personal position. It will:
- Identify potential claims
- Identify how unavoidable claims may be mitigated
- Assess their personal financial position to provide a guide as to how any claims may be settled
- Maximising redundancy and statutory entitlements in the event of insolvency
- Reinforce the director’s duties and responsibilities to the Company and its creditors
By clarifying what is likely to happen and what the real impact on a director is likely to be they may be less reluctant to push the button on the inevitable insolvency.
If you have directors you are speaking to now or have spoken to in the past who are delaying decisions to wind up the company because of personal liabilities which will arise, we can help move these situations through to their inevitable conclusion.
PGUK are offering a no obligation free 30 minute telephone call to any director you may have who find themselves in this situation. After 5 years of progressing and settling over 500 personal liability claims for directors, PGUK are well placed to offer solid factually based advice to the director. This combined with our knowledge of insolvency means we can offer independent advice to make sure the director is confident that he is making the right decision and feels confident of the outcome.
A key part of the Director Liability Review is to ascertain whether a director has a legitimate redundancy claim through the Redundancy Payments Office and make sure he takes the appropriate actions to be in a position to maximise that claim pre liquidation. This has in many cases then provided a war chest to help settle liabilities arising from the liquidation.
Delays due to no funds to pay for the liquidation
Directors typically find themselves in difficult financial times following the failure of their company. Many directors attempt to strike off their company in an attempt to avoid the costs of liquidation only to have this rejected by creditors.
So what do they do? Typically nothing.
Redundancy and other statutory entitlements paid from the National Insurance Fund through the Redundancy Payments Office could provide the funds to pay for the company to be put into liquidation.
Redundancy Claims UK (RCUK) are offering a free qualification call to establish if directors have a legitimate claim in the event of liquidation. If they do, then RCUK will assist them with the claim process to ensure they have the confidence to rely on that claim if ultimately it will be used to fund the liquidation.