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Insolvency – Administration

Insolvency is defined in the Insolvency Act 1986, but broadly it means when a company does not have sufficient assets to discharge its liabilities as they fall due.

If this occurs, there are options open to the company owners and other stakeholders, one of which is administration. Administration is an insolvency process where an insolvent company is placed under the control of an insolvency practitioner (IP) to enable the IP to achieve objectives laid down in legislation.

How does a company enter administration?

There are two ways for a company to enter administration:

  • By court order – an application for a court order can be made by creditors i.e. those owed money by the company, the company itself, its directors, a liquidator, a supervisor of a CVA or pursuant to legislation.
  • By an out of court process by lodging certain documents with the court – this process is only available to the company or its directors or a party with a qualifying floating charge (usually a bank or commercial lender).

Why would a company or its directors put it into administration?

From the date that an application is made to court or a notice of intention to appoint administrators is filed, a moratorium in respect of claims will apply to protect the company against actions from creditors. In general terms this means that creditors will not be able to issue proceedings, HMRC will not be able to distrain or issue a winding up petition against the company and the landlord will not be able to forfeit its lease. If the company is concerned that creditors may issue proceedings then administration can provide some short term protection, allowing the company to restructure.

Often companies that enter administration end up being sold or at least their businesses and assets do. Sometimes a sale is agreed prior to the company going into administration and it may be a term of completing the sale that the company is put into administration first. Such sales are known as pre-packs. Pre-packs can be a relatively quick and smooth way to continue the business with as little disruption as possible.

What are the objectives of the administration?

The first objective of an administrator is to rescue the company so it can carry on as a going concern.

If this isn’t possible then the aim is to achieve a better result for the company’s creditors than would be likely if the company was put into liquidation. If such a better result cannot be achieved, then the objective is to realise the property of the company and distribute the proceeds to the company’s secured and preferential creditors in the first instance.

Next steps

 

If your company is experiencing financial difficulties and you are considering administration please get in touch. We can provide initial advice about your restructuring options and introduce you to an IP.

If you are considering purchasing a business or assets from an administrator, please get in touch. We have a wealth of experience in structuring pre-pack sale agreements and advising individuals and companies on purchases of distressed businesses and assets

Contact

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Neil Gouldson

neil-gouldsonSenior Associate

Neil joined Bermans in February 2019 and is a senior associate in our employment team.

Neil has a strong track record in the legal services industry specialising in all areas of general employment law advice across a wide range of sectors including regulatory work in care, teaching, NHS, finance/banking and professional sport.

Neil takes a commercial approach with his clients and has an ability to make complex legal issues simple to understand.

He is skilled in:

  • Complex Disability Discrimination claims
  • Large scale redundancy programmes
  • Multi day Employment Tribunal litigation
  • Fitness to practice hearings for GP’s
  • Working with GP Practices
  • High court employment litigation
  • Employee issues on the sale and acquisition of a business
  • Pregnancy/maternity cases

Email: neil.gouldson@bermans.co.uk

Tel:  0151 224 0534

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Emma McNamara

emma-mcnamara-headshotParalegal

Emma McNamara joined Bermans in August 2018 in the Private Client department. She is a graduate of Pembroke College, Oxford, where she studied English Language and Literature.

Emma previously worked in a will writing firm, specialising in Probate and Estate Administration for the last 6 years prior to her joining Bermans.

With four children in the family and a lively Border Terrier she enjoys dog walking, running, quizzes and games.


Email: emma.mcnamara@bermans.co.uk


 

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Claire McDonnell

claire-headshot-150x150Senior Associate

Claire qualified as a Solicitor in 2010 and joined Bermans in January 2019 as a Senior Associate in the Litigation and Dispute Resolution team.  Claire has previously worked for an international law firm and a Manchester-based boutique law firm with a focus on providing commercial advice to SMEs.

Claire acts for a wide spectrum of clients including high net worth individuals, large national and regional companies, SMEs and OMEs in all sectors.  She has experience of advising on a wide range of high value and complex commercial matters including breach of contract disputes, partnership disputes, shareholder disputes, professional negligence claims, the seeking of injunctive relief and invoice and asset finance litigation.

Claire works closely with Simon Taylor and Andrew Koffman in providing advice to commercial clients.


Email: Claire.mcdonnell@bermans.co.uk

Tel: 0161 827 4603


 

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Simon Taylor

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Partner & Head of Sport and Entertainment

Simon qualified as a Solicitor in 1980 and joined Bermans in October 2018 as a partner and head of our Sport & Entertainment team.

Simon has over 30 years’ experience and specialises in representing clients in the motorsport and music festival industries providing a full range of legal services.

He has an international reputation within motorsport acting for national governing bodies & their insurers, circuits, clubs, teams, drivers and motorcycle riders. Since joining Bermans, Simon has negotiated contracts for the 2019 season for F1 drivers and team personnel. He also has unrivalled experience of representing clients at hearings before the FIA International Court of Appeal and National Motorsport Courts worldwide.

Simon is also a nationally recognised expert in the entertainment industry and pre-eminent figure in the licensing and organisation of outdoor festivals, events and concert tours. He acts for and is retained by the majority of the country’s largest promoters and organisers.


Email: simon.taylor@bermans.co.uk

Tel: 0161 827 4613


 

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Residential Conveyancing: range of costs

Bermans property team offer a personal conveyancing service for the following types of residential property:

  • Freehold sale or purchase
  • Leasehold sale or purchase
  • Mortgages or re-mortgages

Our conveyancers are experts in guiding you through the legal process and you can be safe in the knowledge that they are supported by our larger commercial property team.

Whether you are buying or selling or refinancing we can provide you with cost certainty and confidence that you are in safe hands.

We provide a list of our headline rates below but we like to provide a specific quote to suit your needs so do get in touch and we will provide a fixed fee quotation.

Description Value/Amount of Property (£) Fees
Purchase or Sale 60,001 – 120,000 £650.00 + VAT
Purchase or Sale 120,001 – 250,000 £795.00 + VAT
Purchase or Sale 250,001 – 350,000 £895.00 + VAT
Purchase or Sale 350,001 – 500,000 £995.00 + VAT
Purchase or Sale 500,001 – 600,000 £1,195.00 + VAT
Purchase or Sale 600,001 – 800,000 £1,295.00 + VAT
Purchase or Sale 800,001 – 1,000,000 £1,495.00 + VAT
Purchase or Sale 1,000,001 – 2,000,000 £1,795.00 + VAT
Purchase or Sale 2,000,001 – £3,000,000 £1,995.00 + VAT
Purchase or Sale 3,000,001 – 4,000,000 £2,495.00 + VAT
Purchase or Sale 4,000,000 – 5,000,000 £3,500.00 + VAT

 

Description Value/Amount of Property (£) Fees
Re-mortgage 60,000 – 250,000 £250.00 + VAT
Re-mortgage 250,001 – 500,000 £350 + VAT
Re-mortgage 500,001 – 750,000 £550 + VAT
Re-mortgage 750,001 – 1,000,000 £750 + VAT
Re-mortgage 1,000,000 £1,000 + VAT

 

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Employment tribunal: Range of costs

Our pricing for bringing and defending claims for unfair or wrongful dismissal (excluding disbursements and Counsel’s fees).

Simple case: £8000 to £10,000 (excluding VAT)

Medium complexity case: £10,000 to £20,000 (excluding VAT)

High complexity case: £20,000 to £75,000 (excluding VAT).

Factors that could make a case more complex:

  • If it is necessary to make or defend applications to amend claims or to provide further information about an existing claim
  • Defending claims that are brought by litigants in person
  • Making or defending a costs application
  • Complex preliminary issues such as whether the claimant is disabled (if this is not agreed by the parties)
  • The number of witnesses and documents
  • If it is an automatic unfair dismissal claim e.g. if an employee is dismissed after ‘blowing the whistle’ on his/her employer
  • Allegations of discrimination which are linked to the dismissal

Disbursements

Disbursements are costs related to your matter that are payable to third parties, such as medical experts. We handle the payment of the disbursements on your behalf to ensure a smoother process.

Counsel’s fees

We would generally instruct a barrister to represent you at the Employment Tribunal hearing. Barristers’ fees are broken down into two areas: i.) a Brief fee, which covers their preparation for the hearing and the first day of the hearing and ii.) a Refresher, which covers each additional day after the first day of the hearing. Brief fees are estimated to be between £850 to £5000 plus VAT (depending on the level of experience of the Barrister, the complexity of the case and the length of the hearing). Refreshers are estimated to be between £700 to £1250 plus VAT (depending on the level of experience of the Barrister).

Key stages

The fees set out above cover all of the work in relation to the following key stages of a claim:

  • Taking your initial instructions, reviewing the papers and advising you on merits and likely compensation (this is likely to be revisited throughout the matter and subject to change)
  • Entering into pre-claim conciliation where this is mandatory to explore whether a settlement can be reached;
  • Preparing claim or response
  • Reviewing and advising on claim or response from other party
  • Exploring settlement and negotiating settlement throughout the process
  • Preparing or considering a schedule of loss
  • Preparing for (and attending) a Preliminary Hearing
  • Exchanging documents with the other party and agreeing a bundle of documents
  • Taking witness statements, drafting statements and agreeing their content with witnesses
  • Preparing bundle of documents for the Tribunal hearing
  • Reviewing and advising on the other party’s witness statements
  • Agreeing a list of issues, a chronology and/or cast list
  • Preparation and attendance at the Final Hearing, including instructions to Counsel

The stages set out above are an indication and if some of stages above are not required, the fee will be reduced. You may wish to handle the claim yourself and only have our advice in relation to some of the stages. This can also be arranged on your individual needs.

How long will my matter take?

The time that it takes from taking your initial instructions to the final resolution of your matter depends largely on the stage at which your case is resolved. If a settlement is reached during pre-claim conciliation, your case is likely to take four to six weeks. If your claim proceeds to a Final Hearing, your case is likely to take between six and twelve months. This is just an estimate and we will of course be able to give you a more accurate timescale once we have more information and as the matter progresses.

Contact us to speak to a member of the employment team.

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Hannah Dowd

hannah-dowd-heashotSolicitor

Hannah joined Bermans in November 2018 and is currently working in Bermans Employment team as a solicitor.

Before joining Bermans, Hannah was a trainee solicitor in high street practice dealing with all aspects of Civil Litigation and Respondent Employment work.

Hannah studied Law at University of Chester, graduating in 2012. She then went on to study at the University of Law in Manchester where she completed the LPC in July 2014.

She then worked as a paralegal for a number of years before obtaining her training contract and qualifying in August 2018.

Hannah is an avid Everton fan, she enjoys watching and playing live music and getting out and about enjoying time with her young family.


Email: Hannah.dowd@bermans.co.uk

Tel:  0151 224 0534

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Debt recovery: Range of fixed fees

Court Claims

These costs apply where for a basic template based claim for an unpaid invoice which is not disputed and enforcement action is not needed. If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs if necessary, which could be on a fixed fee (e.g. if a one off letter is required), or an hourly rate if more extensive work is needed.

Debt value Court fee Our fee (excl. VAT) Total
Up to £300 £25 £95 £120
Up to £500 £35 £95 £130
Up to £1,000 £60 £115 £175
Up to £1,500 £70 £125 £195
Up to £3,000 £105 £125 £230
Up to £5,000 £185 £125 £310
Up to 9,999.99 £410 £145 £555
Over £10,000.00             Request Quote

Anyone wishing to proceed with a claim should note that:

  • The VAT element of our fee cannot be reclaimed from your debtor.
  • Interest and compensation may take the debt into a higher banding, with a higher cost.
  • The costs quoted above are not for matters where enforcement action, such as the bailiff, is needed to collect your debt.

Our fee includes:

  • Taking your instructions and reviewing documentation
  • Undertaking appropriate searches
  • Sending a letter before action
  • Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing claim
  • Where no Acknowledgment of Service or Defence is received, applying to the court to enter Judgement in default
  • When Judgement in default in received, write to the other side to request payment
  • If payment is not received within 7 days, providing you with advice on next steps and likely costs

Matters usually take 6-8 weeks from receipt of instructions from you to receipt of payment from the other side, depending on whether or not it is necessary to issue a claim. This is on the basis that the other side pays promptly on receipt of Judgement in default. If enforcement action is needed, the matter will take longer to resolve.

Please contact us for more information.

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