When a business is in a very difficult financial situation, it is easy for directors to feel that they have no choices left. It is a bit like in personal debt cases where an individual mistakenly feels that there is no alternative to bankruptcy. The common factor is that emotions have entered the decision-making process. It can take someone independent to point out that various options remain.
At Cooper Matthews we are aware that when a company is performing disappointingly things can seem very bleak indeed. Nonetheless, it is inadvisable to throw in the towel when other things can be done and should be reflected on. It could be that a new firm could be formed from the old one, or less drastic measures may be possible.
Certainly, when a business is thriving it has more options than when it is in a distressed state. This is simply because it has much more market power. However, in many cases a company with serious business debt retains the capacity to shape its own future. Nothing will be easy, but there is no reason to surrender and meekly receive a winding up order.
It can be tricky to work out which choices are viable. When you have worked very hard and are emotionally involved in the progress of a firm, it can be hard to distinguish ways out of the mire. In contrast, an experienced insolvency practitioner can often spot ways out of the trouble. A winding up petition is not necessarily on the cards.
business debt, winding up order, winding up petition