Liquidation and Bankruptcy

Some local businesses and individuals can get into financial difficulties. On 21st December, Travelscope Holidays Ltd ceased trading as it was unable to meet its liabilities. In this case, those traveling will have protection as the company is a member of ABTA but many local businesses find they are last in line for payments when a customer goes out of business.

Matthew Bailey says “We can advise you on how to protect yourself against suppliers and customers going out of business. Obviously, protection includes having written terms and conditions of sale which clearly apply and under which ownership of the goods you sell to customers does not pass to them until payment is made (known as a retention of title clause). The clause may also give you a right of entry to their premises to retrieve your goods if they go out of business. These clauses need to be carefully drafted to avoid the clauses being classed as a “charge” or mortgages. Such charges are only valid if registered at Companies House like any other mortgage so avoiding rending those provisions applicable is important.

We can also advise you on payment clauses in contracts, letters of credit for foreign supplies, performance bonds and other legal protection measures. In addition, if you are in difficulties, then we can provide you with all the advice and guidance you need. Individuals go bankrupt and companies go into liquidation. However, there are other options too such as IVA – individual voluntary arrangements with creditors for individuals, and administration instead of liquidation for companies. We also advise on clauses in commercial contracts which deal with situations of liquidation and when contracts can be terminated in such a case. The earlier advice is sought the better. It can often be wise to be in charge of the winding up of a business rather than leaving it to the creditors to apply to wind the business up.

Contact Matthew on 01329 822333