Business Recovery: Early advice ‘vital’ says Ward Hadaway’s Mark Wilkinson

Getting the right advice at the earliest opportunity is vital for business recovery, says expert Mark Wilkinson of Ward Hadaway.
Mark Wilkinson of Leeds-based law firm Ward HadawayMark Wilkinson of Leeds-based law firm Ward Hadaway
Mark Wilkinson of Leeds-based law firm Ward Hadaway

For a confidential chat about any financial difficulties, debt recovery or insolvency issues, you can contact Mark Wilkinson on 0330 137 3244 or [email protected]

A partner in the insolvency and corporate recovery team at the top 100 Leeds-based law firm, he has over 20 years' experience in dealing with a broad range of issues in personal and corporate restructuring and insolvency.

In the lead up to the Ward Hadaway Fastest 50 Awards, in partnership with the Yorkshire Post, which recognise outstanding achievement by Yorkshire companies, Mark explains here the challenges the region’s businesses may face from an insolvency perspective and shares his thoughts on why getting the right advice at the earliest opportunity is vital.

Insolvency, administration, CVAs and liquidation are all terms that we’ve seen in the headlines prior to the onset of the Covid pandemic which began two years ago, writes Mark

The pandemic created unexpected economic instability that shook businesses to their core and led to many having to adapt quickly as well as rely on the extensive government support that was introduced which included the job retention scheme, bounce back loans, business interruption loans and pauses on VAT and corporation tax payments.

The availability of these schemes has helped prop many firms up, supporting them through consecutive lockdowns.

However, as we now enter a new world of living with the virus, much of this support has ended and, as we enter the recovery phase, businesses may need further support and guidance in navigating their way back to full strength.

Financial challenges

Now that Covid-induced restrictions have lifted, one key challenge many businesses will face is increased pressure from creditors who will want their money back quickly.

Creditors may have been patient during the pandemic and may have benefited from the government schemes themselves. Leniency will now fade and demands for payment followed up by winding up petitions can now be presented for debts that exceed £10,000.

Creditors also have the availability to issue claims and seek judgment which can then be enforced by enforcement agents (also known as bailiffs) against assets. These could be essential assets that the business needs to utilise in order to operate.

New legislation that’s been approved is also going to create huge pressures for business owners and their trading premises.

Up until now, commercial landlords have been prevented from taking action against their commercial tenants for non-payment as well as restrictions placed on their ability to use the Commercial Rent Arrears Recovery (CRAR) and debt proceedings generally.

However, this is expected to be lifted later this month and will be replaced, in part, by the Commercial Rent (Coronavirus) Bill. The Bill proposes to provide a binding arbitration service where landlords and occupants of business tenancies have been unable to reach agreement on non-payment of arrears.

Given the current landscape, it's no surprise that we’re already experiencing a rise in the number of Creditor Voluntary Liquidations - current figures demonstrate a 34% rise since January 2020.

Add to this increasing inflation and higher costs of supplies, recruitment and energy with greater cashflow challenges, a perfect storm for insolvency situations is brewing.

Genuine support and advice

For any business, in any sector, feeling pressured financially or finding themselves in distress, I strongly advise that they seek professional advice at the earliest opportunity.

It is quite possible that an insolvency process can be avoided and for directors of a company who think they may encounter difficulties, it is imperative that they seek advice early so as to avoid becoming personally liable for the company debts if the business subsequently fails.

It's worth noting here that a director can be held personally liable for wrongful trading and can also be liable if found to have acted in breach of duty to the company and its creditors.

At Ward Hadaway, we can help with a wide range of financial and operational challenges a business faces.

Our insolvency team is highly specialist and has technical expertise and experience in working with national insolvency practitioners across the UK.

Although we operate across the North of England, we’re local to Yorkshire and our Leeds-based office provides a wide range of legal services so that we can help with general debt advice but also provide specific guidance on insolvency matters too.

We’re here to help

Our first port of call is to discuss in detail with you your specific situation and consider the legal implications before any practical action is taken.

We will help you to explore all options which may include assistance in recovering debts, support with a commercial dispute or, in light of the new changes that are on the horizon, - a landlord and tenant issue.

If insolvency is the appropriate route to take, we will connect you with the right insolvency partner and manage that process every step of the way.

We also offer a free creditors service where our inhouse team can advise business owners on a wide range of insolvency issues where you have or are about to suffer a bad debt as a result of an insolvent customer.

It's not always the worst-case scenario

Seeking the right advice early also maximises the possibility of turning the business around.

It might not be the end of the line and, given our vast experience and expertise with business insolvency and a deep understand of the region, we might be able to find a path away from insolvency and follow a restructuring route instead.

Our strong Yorkshire roots means that we’re fully integrated into the region’s business community and extremely well connected. We will hold your hand through the entire process, explaining what you need to do next and why.

We’re not here to judge, we’re here to support you and develop a strong relationship with you and your business so that we can understand your unique circumstances and provide appropriate options in moving forwards.

However great or small your concern is, we can support you and remove the shackles of financial burden and debt that the business might be in.

We will guide you appropriately and you can feel assured that we’re here to champion you and your business and do all we can to steer you out of any complex financial situations.

*Ward Hadaway LLP operates from three offices in Leeds, Manchester and Newcastle. It has more than 450 members of staff including 97 partners.

It offers a full service law firm, meeting all the legal needs of five core client groups - entrepreneurs and businesses, the built environment sector, healthcare, public and third sector including education, and private individuals

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Twitter: @WardHadaway