If you company faces acute and insurmountable financial distress, you may be tempted to get in touch with an insolvency practitioner, instead of first talking to someone like Corporate Funding Limited. The job of an insolvency practitioner is effectively to liquidate your business, and once they have been appointed, no other resolutions can be sought. Whilst some IPs may present themselves as “director friendly,” they are legally obliged to act “in the best interests of the creditor.” We’ve noticed that this often means they look to seize assets as quickly as possible, strip the company quickly, pay some to the creditors and claim their fee, all whilst leaving the directors and staff potentially unemployed.
This set of priorities means that directors who want to stay in business, pay their creditors and keep their staff, are closed as quickly as possible, with no alternatives offered. Therefore, in times of financial distress, it is vital you talk to someone like Corporate Funding Limited before an insolvency practitioner. This way, you may be able to stay in business and look after as many people as possible whilst at the same time, reach an agreement with your creditors.
With an insolvency practitioner, you might expect to pay £5000, on average, in fees, but this has been known to increase significantly. There are even reports of unscrupulous IPs charging extremely high fees, leaving far less for the creditors they were supposed to represent.