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We are Company Rescue and Not Clear Company Rescue

24th August, 2023

We are Company Rescue and Not Clear Company Rescue!

Clear Company Rescue are offering a solution to your issues by offering to buy your insolvent company.

Does this sound too good to be true?

The actual process is legal as there is nothing stopping anyone from buying an insolvent company in the hopes of turning it around.  However, if the correct course of action is that it should be liquidated, as the debts could never be paid back from current trading, then you have to think why would they do it?!

Why take on the debt and the hassle?  They will of course most likely allow the company to be wound up eventually by a creditor. Check whether you will be charged for this somehow.  Bear in mind that just resigning as a director of a company does not mean that any responsibility for what happened in the past is just wiped away. You could still be disqualified or made personally liable for any of the debts if you have not acted properly.  In addition, under the Insolvency Act 1986, when a company is insolvent the directors have a duty to act in the best interest of the creditors.  If you pay someone to take it off your hands are you actually acting in the best interest of the creditors or yourself?  It is questionable to be sure, and there may be action against you down the road when the company is eventually wound up by the court. Insolvency Practitioners are licensed and under the regulations they have to act in the best interest of creditors.

Be very wary if you somehow manage to keep the assets of the company without paying for them.  This can be what is deemed as a “transaction at an undervalue” and can be reversed up to 2 years later by a liquidator.

Also what about a preference?  If you pay back some monies to a family friend instead of HMRC or BBL then again that can be reversed or voided at a later date.

It goes without saying that selling the company will not absolve you of any personal guarantees that you gave on behalf of the company.

What if you owe the company money?  The new directors will pursue you for the debt.  Directors responsibility under law, if the company is insolvent, is to act in the best interest of creditors.  So they may pursue you personally for the debt.  Many directors are not aware that they owe the company money.  If you have paid yourself drawings and not via PAYE and now the company is insolvent it is highly likely that you owe tax that the company has to pay.  More on overdrawn directors loan accounts here.

Ultimately these sort of schemes and legal gymnastics carry risk. Insolvency is highly regulated and there are no shortcuts.

Do you want to take the risk and give your money to a firm that is unregulated by any professional body?

Remember that company directors are not protected by the law in the same way that general members of the public are.  They are deemed to be “street wise” and knowledgeable.  So there are no cooling off periods, consumer rights, ombudsmen, distant selling rights etc.

Mercian Cycles To Go Into Liquidation

Derby based Cycle builder Mercian Cycles has gone into liquidation.  The firm specialised in making high quality steel frames with hand made decorative joinery ("lugs" in bike parlance).The company confirmed thr news to the publication saying: "Mercian Cycles Ltd has ceased to trade, and we have instructed an Insolvency Practitioner to assist us with taking the appropriate steps to place the Company into Creditors' Voluntary Liquidation."Opus Business Advisory Group have been appointed liquidators and said "we will be working closely with the company to help manage a controlled wind down of the business and a smooth transition for stakeholders".The bike company was founded in 1946 and was seen as quite eccentric with its lugs and flamboyant colours.  The firm had quite a cult following in the UK and the USA.However the cycling industry has had a hard time of late due to over capacity following the pandemic when everyone suddenly started to spend money on Bicycles.  Unfortunately, this new found enthusiasm did not last.

Mercian Cycles To Go Into Liquidation

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