ICSA: Companies in Difficulty: A Guide for Directors

When a large concern ceases to trade the ripples reach out over a very wide pool of businesses – suppliers may be left with unpaid invoices for goods already delivered; related companies and individual officers may find guarantees called upon by banks; and businesses who were customers find themselves without goods or services critical to their own trading.

Further issues arise for the directors of companies which find themselves in financial difficulty. In such circumstances it can be difficult for company directors to arrive at the best strategy for safeguarding the interests of their companies whilst complying with their statutory and fiduciary duties, a breach of which can result in a fine, disqualification, liability to contribute to the company's assets or even a prison sentence.

So whether you are dealing with customers and suppliers who have gone or look as if they are about to go bust, or your own business is struggling to stay afloat, Companies In Difficulty: A Guide for Directors provides clear guidance on what steps need to be taken and when.

Includes clear commentary and guidance on:

• The tests for insolvency
• Administration, receivership, company voluntary arrangements and liquidation
• Commencement of cross-border insolvency proceedings within the EU
• Directors’ duties under the Companies Act 2006
• The obligations of directors in relation to such issues as avoiding wrongful or fraudulent trading or being party to undervalue transactions
• The penalties that may result from a breach of statutory and fiduciary duties
• Variation of contract in the light of worsening trading conditions
• Creditors meetings

It points out the early warning signs that a customer or supplier may be in difficulty and the action required, and covers the contractual and procedural safeguards for ensuring that your company gets paid or its goods returned .