Buying your insolvent company’s business, from the liquidator or administrator?

It’s common for former shareholders and directors of an insolvent company to form a new company to buy the business from the administrator. The administrator has a duty to get the best price they can, so the new company cannot buy the business at an undervalue. However, a new company owned and run by the former management is often the best buyer for the business, especially if their knowledge of the business and its market, their personal contacts and their ability to act quickly will help keep key employees, customers and/or suppliers on board, so that creditors will benefit.

This will not, of course, be possible if any of the directors are liable to be disqualified from being directors because they acted improperly while directors of the old company. Also, there are restrictions on directors of an insolvent company being involved in a new company whose name is similar to the old company name.

Next Steps

If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising because of any person or organisation acting or refraining from acting on any information.