With a significant rise in the number of corporate insolvencies in Scotland during the last quarter of 2021, Dunedin Advisory’s Christine Convy (specialist Restructuring and Insolvency Practitioner) discusses an option companies can consider.
“With the ending of government covid support measures and govt backed loan schemes now having to be repaid, it’s no surprise that company directors are taking a hard look at their companies short and medium-term financial viability.”
If a business has exhausted all options available to it and is financially beyond the point of rescue, a Creditors’ Voluntary Liquidation (CVL) can be considered by directors and shareholders. A CVL is a voluntary way of placing an insolvent company into liquidation. Legally this requires the services of a qualified Insolvency Practitioner who will work in conjunction with company Directors giving them, their employees, creditors and shareholders an orderly exit from the business.
Ms. Convy continues: “No one goes into business thinking it will fail but now sadly some have to face the harsh reality of this happening and managing the expectations of all interested parties.”
Directors would be well advised to seek advice at the earliest possible stage, giving them time to consider the options available and time to make an informed decision.