INSOLVENCY & CORPORATE RESTRUCTURING

Solicitors in Sligo, Dublin, Boyle, Ballina, Galway & Limerick

What is Insolvency?

Insolvency means the inability to pay one’s debts as they fall due. Insolvency in business refers to the inability of a company to pay off its debts.
Business insolvency is defined in two different ways:

• Cash flow insolvency – Unable to pay debts as they fall due.
• Balance sheet insolvency – Having negative net assets – i.e. liabilities exceed assets.

A business may be ‘cash flow insolvent’ but ‘balance sheet solvent’ if it holds liquid assets, particularly against short term debt that it cannot immediately realize if called upon to do so. Conversely, a business can have negative net assets showing on its balance sheet but still be cash flow solvent if ongoing revenue is able to meet debt obligations, and thus avoid default – for instance, if it holds long term debt. Many large companies operate permanently in this state.

Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.

Our Insolvency Team

Never has it been more relevant to get the right legal advice in time. With banks and financial institutions moving to ring fence their securities you need to ensure that you are advised of your options through tough times. Lenders continually emphasise the importance of keeping communication channels open and working with your financer through financial difficulties.

We understand the stress associated with a tough economic climate and we will assist you and provide legal assistance through negotiating with the banks and advising you and your company through Receivership, Examinership and Liquidations. We will ensure that the very best outcome is achieved for you and your Company.

Areas of expertise include:

Formal Insolvency

Our lawyers can advise stakeholders on all aspects of formal insolvency including company voluntary arrangements, receivership, liquidation and administration.

Insolvency Dispute Resolution

Our team of solicitors can assist you with dispute resolution issues from bringing and defending avoidance actions to sanctions against directors and contested debt recovery and winding-up proceedings.

Corporate restructuring

Corporate restructuring has been a major area of the practice at Callan Tansey Solicitors as a result of the global economic downturn.

A major part of our work includes all forms of reconstructions, whether it be in-house solvent reorganisations for tax saving, to reorganisations designed to avoid formal insolvency.

Transaction planning

Legal advice and assistance is also provided for any transactions that are being considered. This might be assessing an insolvency risk and subsequently drafting a deal to give you the best protection against a subsequent counter-party insolvency.