The role of the Insolvency Practitioner is to administer an insolvency outcome within the legislation and to ensure a fair, efficient and quick redistribution of assets. In doing this they need to strike an appropriate long-term balance between the interests of debtors and creditors (the people who are owed money). Whether as accountants or lawyers, IPs (of which there are around 1750 in the UK) deal with personal and business insolvencies, from large to small businesses; and help from ‘turnaround’ to formal insolvency procedures.
In a study of all the Company Voluntary Arrangments (CVAs) filed in 2008, the average number that an adviser that responded proposes yearly is just two; an incredibly small number. There are several hundred CVAs proposed annually (765 in 2010 and 767 in 2011); the average success rate with HMRC’s Voluntary Arrangements Service on CVA proposals is around 73%. It is clear that Directors should be looking to turnaround and company rescue specialists that have experience in succeeding with their proposals and are doing CVAs on a daily basis. Specialist CVA IPs may have a success rate of over 90%. Directors are therefore wise to ask for the track record of the IP they are consulting.
Since 2010, KPMG LLP has proposed the two biggest recent CVAs, for Blacks Leisure plc and JJB Sports plc and is one of the leading CVA providers for large national organisations. KSA Group Limited proposed CVAs for companies with turnovers ranging from £300k to £15m and proposed 6.5% of all CVAs in 2011. Many of the other firms hardly feature at all in the statistics and this may well be because voluntary arrangements are a very specialised process. Directors should ensure if they are considering a CVA that they instruct one of the leading CVA specialist insolvency practitioners.
Our Insolvency Solicitors & Barristers are able to give you specialist legal information and advice on your businesses best insolvency options. Just click here to complete our online contact form or for a free initial telephone consultation with a qualified winding up lawyer call 0845 8622 529.