Phoenixing
Phoenixing is a way for you to save your business by writing off all your debts, buying back the company’s assets and giving you and your newly formed company a chance of a successful future. There are strict rules and regulations governing the phoenixing process but it could be a viable alternative to liquidation that allows you to continue trading in a similar way, often preserving the company brand, relationships with customers and jobs. All you have to do is act quickly and call us, so we can guide your company through the phoenixing process efficiently and professionally, ensuring all legal requirements are met.
What is Phoenixing?
Phoenixing, pre pack administration or a directors’ managed buyout as it sometimes known is simply the act of forming a new company which then buys the assets, contracts and goodwill of a failing business. The new business is often allowed to use the same premises, a variation of the old name and even retain the same customers and staff but, crucially, does not take on the old company’s debt. It is not necessary to gain permission from the creditors to do this, as it is hoped this would preserve the value of the assets and so give the best possible return to any creditors. This may not necessarily happen in the case of full liquidation. At Insolvent Solutions, we can help you consider all the options before you decide to move forward so you can rest assured that you are taking the best possible course of action for your business. Call us now to discuss the best solution for your company.
How does it work?
Call Us: The sooner you take action, the sooner steps can be taken to get your company out of debt and allow you to face the future. Our expert advisers will listen to every aspect of your situation and come to a full understanding of your business to advise you on the best solution, whatever it might be. At Alps, we are here to help you, not your creditors, and we guarantee to offer professional, impartial advice so you and your company can deal with your debts effectively. If phoenixing seems a viable option for your business, one of our trained insolvency experts will then meet with you free of charge to talk you through the next steps and gather further details on your business.
Appoint a Liquidator: Once we have gathered all the relevant information together and the directors confirm phoenixing is the best course of action, we will pass this information onto our licensed practitioner who will act as nominated liquidator and transfer the assets to a phoenix company. Insolvent Solutions will then contact all the company's creditors to inform them of the situation. From this point onwards, your creditors will talk to us instead of you, stopping any unwanted phone calls or letters you have previously been receiving.
Transferral of Assets: Once the assets of the company are valued and the insolvency practitioner has received payment for these, the sale agreement is completed and assets will be legally transferred to the phoenix company. From this point, the new company can begin trading using these assets and move forward to a successful future, debt free.
Creditors Meeting: Once all creditors have been informed, a meeting is advertised in the press and held approximately one month later. Directors from your company are required to attend but an expert from Insolvent Solutions will also be there to act for you and in most cases, creditors choose not to attend and this is a very straightforward process.
Liquidation Begins: At this point, the company is officially liquidated and any remaining assets or value are used to pay creditors claims where possible. The liquidator will handle almost all of the paperwork and activity after this stage based on information provided by you.
Why should I do it?
There are many advantages to phoenixing for directors and shareholders if it seems the company may have a future if it can continue without debt.
The new business can start trading without the problems of old debt or even a need to repay the debt as with a CVA. Phoenixing allows for minimum disruption to the business and, in some cases, it may even be possible to continue trading without staff or customers being aware of any changes.
The new company can retain many facets of the old company including employees, relationships with suppliers and good will. All this would be lost if a company were simply to go into liquidation.
Phoenixing allows a new start for a company. The directors can initiate new procedures and working practices and avoid making the mistakes that caused the old company to fail.
