TRW & Co · Banking, Finance & Restructuring
Restructuring and Insolvency Solicitors in London
Insolvency solicitors London companies and creditors instruct advise on the decisions that decide whether value survives financial distress: directors' duties, moratoriums, CVAs, schemes, restructuring plans, administration and liquidation. Since the Thames Water appeal, courts are scrutinising fairness more closely, so early, evidence-led planning matters more than ever.
Key pointOnce insolvency is probable, directors must weigh creditors' interests, and every payment, transfer and board minute from then on may later be examined by an office-holder. Early advice protects both the company's options and the directors personally.
At a glance
Core statutes
The Insolvency Act 1986, the Insolvency (England and Wales) Rules 2016 and Parts 26 and 26A of the Companies Act 2006 govern rescue and insolvency processes.
Statutory demand threshold
A company is deemed unable to pay its debts if it fails to pay an undisputed statutory demand for more than £750 within 21 days.
Cross-class cram-down
A Part 26A restructuring plan can bind a dissenting class if it is no worse off than in the relevant alternative and the court finds the plan fair.
Directors' creditor duty
Following Sequana, directors must give weight to creditors' interests once insolvency is imminent or insolvent liquidation or administration is probable.
HMRC priority restored
Since 1 December 2020 HMRC ranks as a secondary preferential creditor for VAT, PAYE and other taxes companies collect on its behalf.
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What insolvency solicitors London businesses instruct actually do
Insolvency solicitors London boards, lenders and investors instruct are rarely called in at the moment of collapse. The most valuable work happens earlier: when cash forecasts turn red, a covenant test looks likely to fail, a major customer stops paying or a creditor serves a statutory demand. At that point the legal question shifts from "how do we trade?" to "whose interests must the directors now protect, and which restructuring tool preserves the most value?"
Restructuring and insolvency law in England and Wales covers both rescue and exit. Rescue means renegotiating debt, refinancing, a company voluntary arrangement, a scheme of arrangement, a restructuring plan or a moratorium. Exit means administration, liquidation or a sale of the business and assets, sometimes as a pre-pack. Each route has different voting thresholds, court involvement, cost, publicity and consequences for directors, employees and shareholders.
The same body of law affects creditors. Suppliers, landlords, lenders, bondholders and HMRC all need to know how to enforce, how to vote, what priority they hold and how to challenge a plan that treats them unfairly. Good insolvency solicitors London clients rely on act on either side of that table, and the best advice comes from understanding both.
The legal framework in England and Wales
The core statute is the Insolvency Act 1986, supported by the Insolvency (England and Wales) Rules 2016. The Act governs company voluntary arrangements, administration, receivership, liquidation, the director liability provisions and the antecedent-transaction claims office-holders bring after a failure.
The Corporate Insolvency and Governance Act 2020 added three permanent tools: the free-standing moratorium in Part A1 of the Insolvency Act 1986, the restructuring plan in Part 26A of the Companies Act 2006, and restrictions on suppliers terminating supply contracts because a customer enters an insolvency or restructuring process (the "ipso facto" rule in section 233B of the 1986 Act). Schemes of arrangement remain available under Part 26 of the Companies Act 2006.
Regulators, courts and office-holders
Only a licensed insolvency practitioner can act as administrator, liquidator, supervisor of a CVA or monitor in a moratorium. The Insolvency Service oversees the regime, runs the Official Receiver function in compulsory liquidations and bankruptcies, and investigates director conduct with a view to disqualification under the Company Directors Disqualification Act 1986. Contested matters are heard in the Insolvency and Companies List of the High Court's Business and Property Courts in the Rolls Building, with appeals to the Court of Appeal.
Where Scotland and Northern Ireland differ
Much of the 1986 Act applies in Scotland, but Scotland has its own insolvency rules, its own court procedures in the Court of Session and sheriff courts, and a separate personal insolvency regime (sequestration). Northern Ireland has a parallel code under the Insolvency (Northern Ireland) Order 1989. Restructuring plans and schemes are Companies Act processes, so they can be used across the UK, but enforcement steps and security realisation must follow local law.
When a company is insolvent, and why the test matters
Section 123 of the Insolvency Act 1986 sets out when a company is deemed unable to pay its debts. The two practical tests are cash flow (it cannot pay debts as they fall due) and balance sheet (its liabilities, including contingent and prospective ones, exceed its assets). A company is also deemed unable to pay if it fails to satisfy a statutory demand for a debt over £750 within 21 days, or a judgment remains unsatisfied after enforcement.
The test matters for three reasons. It is the gateway for a winding-up order. It is a factor in whether past payments and transfers can be unwound as preferences or transactions at an undervalue. And, as the Supreme Court explained in BTI 2014 LLC v Sequana SA [2022] UKSC 25, once insolvency is imminent or insolvent liquidation or administration is probable, directors must give appropriate weight to creditors' interests alongside those of shareholders.
A statutory demand or a threatened winding-up petition is often used as leverage over a disputed debt. If the debt is genuinely disputed on substantial grounds, the company can apply to restrain the petition. Act quickly: once a petition is presented, section 127 makes later dispositions of company property void without a validation order, and banks frequently freeze accounts as soon as it is advertised.
Restructuring and insolvency tools compared
Choosing the right process is the central decision insolvency solicitors London boards instruct are asked to make. The options below are not mutually exclusive: a moratorium can buy time to propose a CVA, and a restructuring plan can be paired with a sale through administration.
| Process | Who controls the company | Approval | Typical use |
|---|---|---|---|
| Part A1 moratorium | Directors, supervised by a monitor | Filing at court (court order for some companies); initial period of 20 business days, extendable | Breathing space from creditor action while a rescue is negotiated |
| Company voluntary arrangement | Directors, with a supervisor | At least 75% by value of creditors voting, without more than half of unconnected creditors against | Compromising trade, landlord and unsecured debt; cannot bind secured or preferential creditors without consent |
| Scheme of arrangement (Part 26) | Directors | 75% by value and a majority in number of each class, plus court sanction | Amending bond or loan terms; solvent and insolvent reorganisations |
| Restructuring plan (Part 26A) | Directors | 75% by value of each voting class, court sanction; cross-class cram-down possible | Complex capital structures, including binding dissenting classes |
| Administration | Administrator (licensed IP) | Appointment out of court or by court order | Rescue as a going concern or a better result for creditors than liquidation; business sales and pre-packs |
| Creditors' voluntary liquidation | Liquidator | Shareholder resolution; creditors may choose the liquidator | Orderly closure of an insolvent company |
| Compulsory liquidation | Official Receiver, then a liquidator | Court winding-up order on a petition | Creditor-driven exit; investigations into the company's affairs |
Restructuring plans after Adler and Thames Water
The restructuring plan's distinctive feature is cross-class cram-down. The court may sanction a plan despite a dissenting class if no member of that class would be worse off than in the "relevant alternative" (usually administration or liquidation) and at least one class with a genuine economic interest in the relevant alternative has voted in favour. The court still has a discretion and must be satisfied that the plan is fair.
In Re AGPS (BondCo) plc [2024] EWCA Civ 24 (the Adler case) the Court of Appeal held that departures from the order of priority that would apply in the relevant alternative need proper justification. In Kington S.à r.l. v Thames Water Utilities Holdings Ltd [2025] EWCA Civ 475 it upheld the Thames Water plan while stressing that fairness is assessed case by case, that the objections of out-of-the-money creditors should not be automatically disregarded, and that adequate time must be allowed for the court to consider a plan. Our article on the Part 26A restructuring plan explains the process in more detail.
Administration versus liquidation
Administration under Schedule B1 to the Insolvency Act 1986 gives the company a statutory moratorium and puts an administrator in control with a hierarchy of objectives: rescue the company, achieve a better result for creditors than winding up, or realise property for secured or preferential creditors. Liquidation ends trading and turns to realising assets and investigating the past. We compare the two in administration vs liquidation.
Directors' duties, creditor priority and claims after failure
Most director exposure arises from what happens in the months before an insolvency process. Insolvency solicitors London directors consult should test every major decision against these provisions while there is still time to change course.
- Wrongful trading (section 214): a liquidator or administrator can seek a contribution from directors who continued trading after they knew, or ought to have concluded, that insolvent liquidation or administration could not reasonably be avoided, unless they took every step to minimise loss to creditors. See our guide to wrongful trading.
- Fraudulent trading (section 213): applies to anyone knowingly party to carrying on business with intent to defraud creditors, and has a criminal counterpart in the Companies Act 2006.
- Transactions at an undervalue and preferences (sections 238 and 239): office-holders can unwind transfers for inadequate value, and payments that put a creditor in a better position, made within statutory look-back periods while the company was insolvent.
- Misfeasance (section 212): a summary route to recover for breaches of duty, including the creditor duty recognised in Sequana.
Who gets paid first
Fixed-charge holders are paid from their secured assets. Then come the costs of the process, preferential creditors (including certain employee claims and, since 1 December 2020, HMRC as a secondary preferential creditor for taxes the company collects on its behalf, such as VAT and PAYE), and then floating-charge holders. A "prescribed part" of floating-charge realisations is ring-fenced for unsecured creditors; for floating charges created on or after 6 April 2020 the cap is £800,000. Shareholders rank last.
The restructuring tool a board chooses usually matters less than when it chooses it: the same plan that preserves value at month three can be impossible at month nine.
How a restructuring typically unfolds
Every case is different, but in the experience of insolvency solicitors London practitioners a well-run restructuring follows a recognisable sequence. The timetable is driven by liquidity: the date the cash runs out sets the deadline for everything else.
- Early warning and triage. Board receives a short-term cash flow forecast, identifies imminent defaults and takes advice on its duties. Directors start minuting decisions and the reasons for them.
- Stabilise liquidity. Negotiate standstills with lenders, time-to-pay arrangements with HMRC and payment plans with key suppliers. Consider whether a Part A1 moratorium is needed to stop creditor action.
- Options analysis. Advisers model the relevant alternative (usually administration or liquidation) and compare it with a consensual deal, CVA, scheme, restructuring plan or sale. This analysis becomes the evidential core of any court application.
- Stakeholder negotiation. Agree terms with key creditor groups, often documented in a lock-up agreement. Identify classes and the likely dissenters early.
- Implementation. Launch the chosen process: convening hearing and creditor meetings for a scheme or plan; proposal and decision procedure for a CVA; notice of intention and appointment for administration.
- Sanction or challenge. The court considers fairness and any objections at the sanction hearing. CVAs can be challenged within a statutory window for unfair prejudice or material irregularity.
- Post-completion. New money is advanced, debt is exchanged or released, and the company trades on. If the rescue fails, office-holders investigate conduct and may bring claims.
Documents and evidence to assemble
Start collecting these early, because the court and creditors will expect them:
- 13-week cash flow forecast and longer-term business plan, with assumptions explained.
- Finance documents, intercreditor agreements, security and guarantees, including any personal guarantees from directors.
- Board minutes showing what directors knew and why they decided as they did.
- Key contracts, leases and supply agreements, with termination and change-of-control provisions identified.
- An independent comparator or valuation report on the relevant alternative.
- HMRC correspondence and any time-to-pay arrangements.
- Employee data for redundancy and TUPE analysis if a sale is contemplated.
Risks and common mistakes
Continuing to trade on hope rather than a plan
Directors are not required to stop trading the moment a company becomes insolvent. They are required to take every step to minimise potential loss to creditors once insolvent liquidation or administration becomes unavoidable. A credible plan, supported by forecasts and professional advice and kept under regular review, is the best defence to a later wrongful trading claim. Continuing to take customer deposits, run up HMRC arrears or pay connected creditors while the plan is speculative is the pattern that most often leads to personal liability and disqualification proceedings.
Paying favoured creditors before the process
Repaying a director's loan, clearing a personally guaranteed bank debt or settling a key supplier shortly before administration can be attacked as a preference under section 239. For connected persons the look-back period is longer and the desire to prefer is presumed. The office-holder can seek repayment from the recipient, and the director may face misfeasance and disqualification consequences. Take advice before making any payment that is out of the ordinary course once financial difficulty is apparent.
Misjudging creditor classes in a scheme or plan
Classes are composed of creditors whose rights are not so dissimilar that they cannot consult together with a view to their common interest. Getting classes wrong can derail a scheme or plan at the sanction hearing, after months of cost. The court will scrutinise both the rights being compromised and the new rights conferred. Proper class analysis, early engagement with likely objectors and full, fair explanatory statements reduce this risk.
Underestimating the relevant alternative evidence
Since Adler and Thames Water, the comparison with the relevant alternative and the fairness of how restructuring benefits are shared are central to any cram-down. A thin valuation, prepared late, invites a contested hearing and gives dissenting creditors something to attack. Commission independent evidence early, test it against the creditors' likely arguments and leave enough time in the timetable for the court to engage with it properly.
Ignoring personal guarantees and security
Founders often focus on the company and overlook their own exposure. A personal guarantee can turn a corporate insolvency into a personal one, and lenders will usually call guarantees as soon as the company enters a formal process. Review the terms of any personal guarantees, negotiate releases as part of a consensual deal where possible, and take separate advice where the director's and company's interests diverge.
Cross-border restructuring: Bangladesh, the EU, the Gulf and Singapore
For insolvency solicitors London is a natural hub because English law remains the governing law of many international loan, bond and trade finance documents. That gives the English courts a central role in cross-border restructurings, and the restructuring plan and scheme have been used by groups with limited UK operations where there is a sufficient connection, such as English-law debt.
Recognition of foreign proceedings in Great Britain runs through the Cross-Border Insolvency Regulations 2006, which implement the UNCITRAL Model Law, and through section 426 of the Insolvency Act 1986 and common law assistance. Under the long-standing Gibbs rule, a debt governed by English law is generally not discharged by a foreign insolvency process unless the creditor submits to it. The Government has consulted on adopting the newer UNCITRAL model laws on insolvency-related judgments and enterprise groups; check the current position before relying on them.
Bangladesh
For Bangladesh-linked groups, corporate winding up sits under the Companies Act 1994 and the High Court Division, and lender recovery commonly runs through Bangladesh's money loan courts. There is no simple statutory route for an English restructuring to be recognised there. Where a group has both English-law financing and Bangladeshi operating assets, the restructuring has to be designed in both systems at once, with Bangladeshi counsel advising on local enforceability and Bangladesh Bank requirements. Our UK–Bangladesh disputes team works on these matters, and our guide on how to enforce a UK judgment in Bangladesh covers the enforcement side.
EU, Gulf and Singapore
Since the UK left the EU, UK insolvency proceedings no longer benefit from automatic recognition under the EU Insolvency Regulation; recognition depends on each member state's domestic rules. Singapore has adopted the UNCITRAL Model Law and has its own restructuring tools, which can be used alongside English proceedings. In the UAE, onshore federal bankruptcy law and the separate regimes of the DIFC and ADGM free zones need to be considered. Where assets sit in several jurisdictions, coordinated local advice is essential.
How TRW & Co's insolvency solicitors London team helps
TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority. We advise companies, directors, creditors and investors, and we work with licensed insolvency practitioners, financial advisers and, where advocacy in the higher courts is required, specialist counsel.
Board advice in distress
We advise directors on their duties as insolvency approaches, structure board decision-making and minutes, and help assess when a formal process is in creditors' interests. The aim is a defensible record and a realistic plan.
Restructuring plans and schemes
We prepare class analysis, explanatory statements, lock-up agreements and the evidence on the relevant alternative. We run the convening and sanction stages with counsel, and act for supporting or opposing creditors.
CVAs, moratoriums and administrations
We draft proposals, coordinate with the nominee or monitor, handle notices of intention and appointments, and advise on pre-pack sales including connected-party requirements.
Creditor strategy and enforcement
We advise lenders, landlords and suppliers on security, statutory demands, winding-up petitions and voting, and on challenging CVAs and plans that treat them unfairly. See our contentious insolvency page.
Office-holder claims
We act for and against office-holders in claims for wrongful trading, preferences, transactions at an undervalue and misfeasance, and in director disqualification matters.
Cross-border coordination
We coordinate English proceedings with local counsel in Bangladesh, the Gulf, Singapore and the EU, drawing on our offices in Dhaka, Singapore and Dubai where the matter requires.
Restructuring rarely stands alone. It often involves our banking and finance team on new money and security, and our insolvency advice for directors practice where personal exposure is in issue. You can see the full range on our practices page.
Checklist for boards, lenders and investors
- Do we have a rolling 13-week cash flow forecast the board reviews at least weekly?
- Have directors been advised on when the creditor duty applies, and are decisions minuted with reasons?
- Have we mapped every finance document, guarantee, security interest and cross-default?
- Do we know what the relevant alternative looks like and who would be in the money in it?
- Have we identified our critical suppliers and checked how section 233B affects termination rights?
- Are HMRC liabilities under control, or is a time-to-pay arrangement needed?
- Have we considered whether a moratorium, CVA, scheme, restructuring plan or administration fits best?
- Is there foreign law, a foreign asset base or foreign creditors that require coordinated local advice?
- Are any connected-party payments or asset transfers planned that could later be challenged?
If you are facing any of these questions, insolvency solicitors London based at TRW & Co can help you work through them quickly and confidentially. Contact us by email at info@trw.co or by phone on +880 1779 127165, or visit us at Holborn Gate, 330 High Holborn, London WC1V 7QH.
Frequently asked questions
01When should a company speak to insolvency solicitors?
As soon as directors doubt the company can pay its debts as they fall due over the coming months, or a lender signals a likely covenant breach. At that stage all options remain open, including consensual refinancing, a moratorium, a CVA or a restructuring plan. Waiting until a winding-up petition is presented narrows the choices, can freeze bank accounts and increases directors' personal risk. Early advice also helps directors create a clear record of how they considered creditors' interests, which matters if the company later enters administration or liquidation.
02What is the difference between a CVA and a restructuring plan?
A company voluntary arrangement is an Insolvency Act process approved by at least 75% by value of creditors voting, without court sanction unless challenged. It cannot bind secured or preferential creditors without their consent. A restructuring plan under Part 26A of the Companies Act 2006 requires court sanction, groups creditors into classes and can bind dissenting classes, including secured creditors, through cross-class cram-down. Plans are more powerful but more expensive and evidence-heavy, so CVAs remain common for simpler compromises of trade and landlord debt.
03Can directors be personally liable if a company fails?
Yes, in several ways. A liquidator or administrator can claim a contribution for wrongful trading if directors continued trading after they ought to have concluded insolvent liquidation or administration was unavoidable without taking every step to minimise creditor losses. Directors may also face misfeasance claims, liability for preferences they received, claims under personal guarantees and disqualification proceedings brought by the Insolvency Service. Liability is not automatic: directors who take advice, monitor the position closely and act to protect creditors are well placed to defend their conduct.
04How long does a restructuring plan take?
There is no fixed statutory timetable. A plan involves preparing the proposal and evidence, a convening hearing, creditor meetings and a sanction hearing, and contested cases take longer. The Court of Appeal in the Thames Water case emphasised that parties must leave enough time for the court to consider a plan properly, so compressed timetables driven by a liquidity cliff carry real risk. Realistic planning starts with the date the company's cash runs out and works backwards, often with a lock-up agreement and interim funding in place.
05What can a creditor do if a debtor company will not pay?
An undisputed debt can be pursued by statutory demand and, if unpaid, a winding-up petition. Where the debt is disputed on substantial grounds, a petition is likely to be restrained and the creditor may face costs, so ordinary litigation or adjudication is usually the better route. Secured creditors may be able to appoint an administrator or receiver under their security. Creditors in a CVA, scheme or plan should engage early on class composition and voting, and consider a challenge if the proposal treats them unfairly.
06Does an English restructuring bind creditors and assets overseas?
It binds creditors as a matter of English law, and English-law debts generally cannot be discharged by a foreign process under the Gibbs rule. Whether the restructuring is effective against assets abroad depends on local law. Some jurisdictions recognise English schemes and plans under their own rules or the UNCITRAL Model Law; others, including Bangladesh, may require local proceedings or careful structuring. Where assets or creditors sit outside the UK, local counsel should advise on recognition before the plan is launched.
07Is a pre-pack administration still possible?
Yes. A pre-pack is a sale of the business and assets agreed before the administrator's appointment and completed immediately after. Where the buyer is a connected person, such as an existing director or shareholder, and the sale takes place in the early weeks of administration, regulations introduced in 2021 require creditor approval or an independent evaluator's report before the sale can proceed. Administrators must also explain the sale to creditors. Pre-packs can preserve jobs and value but attract scrutiny, so the marketing process and valuation evidence must be robust.
Sources and official materials
- Insolvency Act 1986 — Core statute for CVAs, administration, liquidation and director liability
- Corporate Insolvency and Governance Act 2020 — Introduced the moratorium, restructuring plan and ipso facto rule
- Companies Act 2006, Part 26A — Restructuring plans for companies in financial difficulty
- Cross-Border Insolvency Regulations 2006 — UNCITRAL Model Law as implemented in Great Britain
- The Insolvency Service — Official Receiver, investigations and director disqualification
- Kington v Thames Water Utilities Holdings: press summary — Court of Appeal guidance on cram-down fairness, 2025
- GOV.UK: Statutory demands — How statutory demands work and how to respond
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.