"Tim Fisher has openly said this week the club is at a 'tipping point and insolvent liquidation
cannot be reasonably avoided'.
Perhaps the most noteworthy aspect of an insolvent liquidation
is that, although the transaction can be purely internal and involve no third parties, for technical reasons the intercompany transaction rules might not apply at all.
"If there is a prospect of an insolvent liquidation
, directors should seek prompt professional advice and ensure the steps they take are properly considered, documented and can be justified." If a business goes into a formal insolvency process, the insolvency practitioner must submit a report on the director's conduct.
As soon as the director is aware that there is no reasonable prospect of avoiding insolvent liquidation
, or fears that that is the case, he must raise the problem with the rest of the board with a view to taking immediate financial advice.
"Shareholders should be aware that if the placing and open offer are not approved at the egm, the directors will have to apply for administration or to commence an insolvent liquidation
of the company".
ATROUBLED Tyneside hospice found to have a "culture of bullying" by inspectors has closed its doors after entering insolvent liquidation
In certain instances these actions are insufficient and the next level of action involves conservation, rehabilitation and/or insolvent liquidation
. Conservation is undertaken in certain cases for the purpose of obtaining control of the entity and conserving assets while a review of the situation is conducted.