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
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.
PLEASE NOTE
These fees exclude disbursements and any Stamp Duty Land Tax payable to HM Revenue and Customs.
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.
This includes taking instructions, preparing and issuing letter by 1st Class post.
The debtor will be advised to send any payments and communication to you directly.
Should you require us to enter into discussion or correspond with the debtor this would be carried out at a standard additional fixed fee of £30.00+VAT per item.
A fee of £10.00+VAT is chargeable for transferring each debtor payment received by us to you.
Stage 2 – Issue of Claim
*Both the Court fee and part of Bermans fee (as shown in brackets) are recoverable if successful
Should the debtor file a defence then this will be referred to one of our lawyers who will advise you accordingly. Any work carried out at this point will be chargeable at an hourly rate, as detailed later in this document.
Stage 3 – Obtain Judgment
*Part of Bermans fee (as shown in brackets) is recoverable if successful
The £ value range given above is dependent on the type of Judgment being requested:
In default of Acknowledgement of Service
In default of Defence
On Admission and acceptance of offer
On Admission and rejection of offer
Stage 4 – Enforcement
Writ of Control (enforcement via HCEO)
*Both the Court fee and part of Bermans fee (as shown in brackets) are recoverable if successful
Should enforcement be unsuccessful the HCEO will charge an abortive fee of £75.00+VAT.
Costings for other forms of Enforcement are available on request (as below):
We recently engaged a contract dispute case in which the client was owed £107,000. The dispute was a few years old and originally the client thought it was delayed/bad debt so they instructed their local solicitor to deal with the dispute. This was unsuccessful and resulted in the defendants counter claiming for £300,000 in attempt to scare the client.
The client tried to negotiate with the defendants and they were prepared to accept a 50% discount to get the matter resolved, but the defendant was unprepared and instead stated ‘take us to court then if you can’. At no point during the last few years has the claimant made any attempt to pursue the counter claim indicating that it was nothing more than a scare tactic.
The client then engaged a well known law firm in Birmingham to help them recover their £107,000 and this was taken on with the client being charged circa £25,000 in fees before the law firm advised that there was nothing more they could do for them and did not litigate because ‘the costs vs returns didn’t stack up’. So the client was left with no recovery, 2 years of lost time and fees incurred equal to 25% of the original claim.
How did Escalate help?
The client heard about Escalate and made contact with the team and we have subsequently engaged the case and are now pursuing. On the basis the client is happy for a 50% recovery (we are looking for 100% plus historic costs if possible), we are hopeful that we will be able to negotiate this through in path A, however we are very certain that if we can’t then the moment it drops into Path B then mediation/settlement will happen.
Why Escalate?
If you have a unresolved dispute, Escalate can help you to avoid wasting your time and money pursuing disputes with unsuccessful outcome.
A sports club sold off part of its land to a developer in return for the construction of a new club house on the remaining club’s land.
Construction costs over-ran, the developer walked off-site and would not return until additional funds were provided by the sports club to support the club house build. This resulted in a ‘stand-off’ that then saw lawyers instructed from both sides to try and resolve.
The case got stuck in a 12 month plus legal process that didn’t progress, other than to highlight the original weaknesses in the contract drafting which meant both sides had some form of potential argument to keep the lawyers going ‘backwards and forwards’.
The case had gained over £50,000 in legal costs before it stalled due to the sports club running out of money to pursue further. Their incumbent lawyer (national firm) was not comfortable in offering a conditional agreement but certainly were not prepared to cover disbursements. It was also unlikely that the case would have been able to get insurance for the adverse costs (After The Event Insurance) below £100,000 which would have made it prohibitive.
How did Escalate help?
The sports club heard about Escalate through their local accountant and transferred the case to us. Within 6 weeks a heads of term agreement was reached.
Through Escalate we were able to demonstrate that the case was now funded and insured to high court meaning the developer needed to do a deal or risk a significant cash gamble under the court.
Why Escalate?
If you have a unresolved dispute, Escalate can help you to avoid wasting your time and money pursuing disputes with unsuccessful outcome.
An entrepreneur sold her marketing company to a UK business with an American parent with the sum to be paid in three stages over a two year period. The final instalment of £220,000 was due in October 2016 but was never received. The previous 2 instalments had been received and there was no prior indication that there would be a problem with the final one.
Upon failure to receive the final payment, approaches were made to the American parent for justification and none were given accept a generic line of ‘breach of contract’.
The entrepreneur engaged legal support in the UK and also appointed lawyers in New York to explore ‘breach of contract’ and non-payment. Approximately £20,000 was spent in legal costs trying to understand the problem and recover the money, but nothing further than an extended previous position which now said ‘multiple breaches of contract’ but none were evidenced despite requests.
The entrepreneur had taken the view of not ‘throwing good money after bad’ and had decided to write off their final payment and sought advice from their accountant in relation to the tax treatment.
How did Escalate help?
The clients accountant informed them of Escalate and the case was engaged. Within 6 months the entrepreneur secured a recovery of £290,000.
Why Escalate?
If you have a unresolved dispute, Escalate can help you to avoid wasting your time and money pursuing disputes with unsuccessful outcome.
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We met up with Jennifer Rigby, Managing Director at 
