Liquidation is the process whereby the Official Receiver or an insolvency practitioner formally takes control of a company in order to realise and distribute its assets to its creditors to satisfy the debts owed. Following this realisation and distribution, the company will be dissolved.
A company can enter into liquidation in a variety of different ways:
Houst’s Restructuring Plan was sanctioned last week. It was notable because of its size, that is, the company is very small compared with the financial giants which have used the process so far - and because it used the cram-down facility to overrule HMRC in its status as a secondary preferential creditor.
SMEs and the Restructuring Plan
Houst Limited's (the Company) restructuring plan (under Part 26A of the Companies Act 2006) (RP) was recently sanctioned at the High Court on 22 July 2022.
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Summary
On 22 July 2022 and after the judge ordered a delay for more evidence, the English court sanctioned the restructuring plan proposed by Houst Limited (Houst). Houst is an SME that is concerned with the provision of property management services for short-term/holiday lets. Its business was badly affected by the Covid-19 pandemic, meaning it was both cash flow and balance sheet insolvent when proposing the plan.
On 20 May 2022 Mr Justice Adam Johnson handed down his judgment in the matter of Swiss Cottage Properties Limited (in liquidation) [2022] EWHC 1495 (Ch). Deloitte, represented by Derrick Dale QC and Ben Griffiths as instructed by DAC Beachcroft LLP, successfully defended a claim for negligence. A copy of the judgment is available here.
This article was originally published by Travel Weekly on 21 July
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