Liquidations
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Maximising recoveries and eliminating personal guarantees
Mike was a partner in a local audit firm. He discovered that a family acquaintance was a director of a company in difficulty. The directors were concerned about personal guarantees for bank lending and a property lease. Following the introduction from Mike, we advised on liquidation but with a delayed start to allow for the lease to be assigned in a tax efficient way and without risk of forfeiture in liquidation. Taking comfort from our involvement, creditors agreed with our approach. The lease was duly assigned without any guarantee liability. Our debt collection specialists collected sufficient debts to enable the bank to be repaid in full without recourse to guarantors.
"Unfortunately, liquidations tend to crystallise guarantee liabilities but an effective liquidator will work with guarantors to minimise the impact on them. Timing of the appointment and actions in the pre-liquidation period is key, particularly where tax and on-going contracts such as leases are concerned."
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