Corporate Restructuring & Insolvency


Reaching a solution in an incredibly difficult and complex situation like insolvency, requires expert help from a team that are cost transparent, commercially minded, pragmatic, proactive and sensitive. The legal rights and remedies need careful handling; we are here to help.

Key insolvency and restructuring services

Our expert team of lawyers can help you in the following restructuring and insolvency areas:

  • transactional insolvency (buying and selling distressed businesses and assets);
  • contentious insolvency (disputes, potential claims and litigation);
  • insolvency and restructuring advisory (everything else, including procedural input);
  • options in event of financial distress;
  • business turnaround and corporate restructuring;
  • effect of all forms of formal insolvency procedure including applicable moratoria;
  • employees in insolvent situations;
  • negotiation and realisation of assets, including debts and bankruptcy properties;
  • cross-border insolvency;
  • exposures (including risk of prosecution) arising on insolvency and phoenixism;
  • powers and duties of office holders, including appointments;
  • administration of insolvent businesses and estates;
  • all forms of litigation under insolvency legislation, including bankruptcy annulment;
  • directors duties and disqualification; and
  • enforcement of creditor / landlord rights in insolvent situations.

Our insolvency clients

The team’s insolvency practitioner clients include:

  • RSM
  • Begbies Traynor
  • James Cowper Kreston
  • KPMG
  • Mazars
  • Portland Business & Financial Solutions
  • Smith & Williamson
  • Quantuma

We also act for and/or on referrals from:

  • funders e.g. banks, building societies, asset-based lenders
  • domestic and overseas suppliers, trading partners, landlords, other creditors
  • company directors
  • bankrupts, their spouses and other family members and guarantors
  • non-IP LPA receivers
  • non-specialist solicitors

Examples of restructuring and insolvency work

  • In recent years the team undertook its single largest assignment to date, assisting the administrators of a major chain of convenience stores to maximise realisations and save jobs through the disposal of numerous trading outlets and associated premises.
  • Acting for various insolvency practitioners in claims against third parties and assets including bankruptcy involving unregistered commercial land in London and an administration involving a disputed charge over the assets of a bus company
  • Advising various creditors with their claims in insolvencies, including one who was a secured creditor seeking to protect a multi-million pound VAT appeal recovery
  • Pursuing and defending various claims for misfeasance, wrongful trading and disqualification against directors of limited companies, including one with a claim value in excess of £4m
  • Advising overseas investors and professional trustee executors on legal transactional and restructuring options for leisure industry interests, including hotels and golf venues both in and outside of CVAs
  • Assisting with numerous sales by or acquisitions from insolvency practitioners, including purchases of a theme park and the assets of a Channel Islands based shipping company and freight forwarder, and sales of multiple convenience stores from administration
  • Assisting colleagues in the firm’s corporate, commercial property and banking teams on aspects of a major refinancing and redevelopment project with an aggregate deal consideration of around £72m
  • Advising various spouses of bankrupt individuals on defending claims being made by the bankrupt’s trustees in bankruptcy in respect of preferences and/or transaction at undervalue claims.
  • Advising company directors’ on the use of ‘prohibited names’ under section 216 Insolvency Act 1986 and the exemptions available to them to avoid criminal prosecution
  • Acting for insolvency practitioners to assist them in bringing applications under the Insolvency Act 1986 for increases to their fee remuneration.
  • Advising bankrupt individuals generally as to their rights when considering the position of their trustees in bankruptcy.

How we work with you

Whilst based in the South of England, Paris Smith acts for businesses and families throughout the UK. Technology has enabled us to provide a high level of service to our clients whether they are local to our offices or not. Our advice can be given in many ways:

  • Over the telephone
  • Via video conferencing
  • In face to face meetings

We will talk through how you would like to be contacted and the best ways for us to meet in our early conversations with you.

Meet the team

Our Corporate Restructuring & Insolvency team is made up of 11 partners, 2 associates and 2 solicitors.  You can find contact details for them below.

Introducing your key contact

Mike Pavitt
Partner – Corporate Restructuring & Insolvency; Commercial Disputes



Frequently Asked Questions

Below we answer some of the most frequently asked questions regarding corporate restructuring & insolvency.

What is insolvency?

Insolvency is the state of being unable to pay your debts as they fall due, or having total liabilities in excess of the total value of your assets.

How long do you stay on the insolvency register?

An insolvent company’s records will remain permanently at Companies House and the London Gazette. In the case of an insolvent individual, if you are bankrupt, your details will normally remain on the individual insolvency register for 12 months until discharge. If you do not comply with your bankruptcy obligations or are subject to a voluntary arrangement, your details may remain on the individual insolvency register for a longer period.

What is the insolvency process?

There is no single insolvency process: an insolvency process could be one of a range of procedures including but not limited to (for companies), voluntary liquidation, compulsory liquidation, administration, company voluntary arrangement, a scheme of arrangement, or (for individuals), bankruptcy, debt relief order, individual voluntary arrangement. One thing these all have in common is that they are formal legal procedures where some sort of notice is either circulated to creditors or filed with the court for a corresponding legal protection, because either an individual or company does not have enough money to pay everything they owe, or because the total value of their assets is exceeded by the total value of their debts.

What is a company voluntary arrangement?

A form of settlement or restructuring between a company and its creditors whereby the company’s debts (often discounted) will be paid over time but the company’s directors remain in control, subject to supervision from a licensed insolvency practitioner. Requires 75% by value of creditors to vote in favour.

What is an individual voluntary arrangement?

A formal and legally binding agreement between an individual and their eligible creditors to pay back their debts over a period of time (often at a discount). An IVA is an alternative to bankruptcy and is supervised by a licensed insolvency practitioner. Some companies (not themselves insolvency practitioners) will advertise debt solutions claiming they are ‘government legislation’ to ‘write off’ large amounts of debt, whereas all they are really offering is to refer the debtor for an IVA.

What is voluntary liquidation?

A voluntary liquidation can either be solvent, by way of a members’ voluntary liquidation (MVL) or insolvent, by way of a creditors voluntary liquidation (CVL). An MVL is commenced by a solvent company to distribute its assets among shareholders in the most tax efficient manner, under the supervision of a licensed insolvency practitioner. A CVL is commenced by an insolvent company, usually as a result of pressure from creditors. Usually much more cost effective than a compulsory liquidation, and more flexible in terms of the company/ its liquidator selling on assets including the company’s main business. A CVL requires a licensed insolvency practitioner to be willing to take appointment as liquidator, and creditors in principle can reject company’s choice of liquidator and install their own.

Can you sue a company in voluntary liquidation?

Yes, provided that the company is either in a creditors’ voluntary liquidation or members’ voluntary liquidation and remains in that procedure at the time you are looking to sue. However, it is possible for a liquidator to apply for a stay in proceedings. Suing a company in liquidation is not something we would ordinarily recommend until you have first reached out to the liquidator, because suing companies can be expensive and very often the claim could be dealt with by the liquidator without incurring court fees.

How much does voluntary liquidation cost?

It depends on the complexity of the company’s affairs, the sector in which the company operates, what assets the company owns, and how many third parties and creditors the company may have. An open conversation should be held with one or more insolvency practitioner accountants who will be able to quote accurately in the circumstances. If you are unsure which insolvency practitioners to approach, we would be happy to discuss this with you.

What is a directors loan account?

A directors loan account is a record of money borrowed from and/ or loaned to a company by its director, distinct from salary, dividends and expense repayments. Overdrawn DLAs need to be paid back following the insolvency of the company or compromised under arrangements made with the relevant insolvency practitioner.

How do you write off a directors loan account?

It is a myth that insolvency procedures automatically result in a written off directors loan account if the director owes money to the company. However, it is possible to improve a company’s balance sheet if directors write off sums that a company owes to them. Directors should carefully consider this option based on the company’s circumstances, and ideally seek advice from accountants and/ or solicitors in the first instance.

What is liquidity in business?

Sometimes, liquidity is used to refer simply to the value of the company’s total assets in excess of the total business liabilities. In the context of potentially insolvent businesses, liquidity refers to either the amount of cash or tradeable assets in the business or the ability of the business to reduce their other assets to cash or tradeable assets quickly.

What happens when a business is liquidated?

Broadly, when a company enters into liquidation, the liquidators will sell the assets to repay the creditors and the company is eventually closed down. The main types of liquidation processes are voluntary liquidation and  compulsory winding up, each of which have different procedures and different effects, and all of which ultimately result in dissolution.

What is a debt relief order?

A streamlined formal insolvency procedure suited to individuals with lower incomes, lower value assets and a relatively modest amount of debt. A DRO is an alternative to bankruptcy but with strict eligibility requirements. Financial thresholds for eligibility for DROs are often reviewed by the government so it is best to check with the government website to see if you qualify.

How do you value business assets?

Business assets are worth what the market is willing to pay for them. They are valued very differently across different sectors and at different points in a business’ life cycle. So far as the court is concerned, business assets should only be valued by a qualified person – the type of qualification will vary per the nature of the asset. If in doubt, seek a valuer in liaison with an accountant or solicitor. It is particularly problematic to ascertain share valuations, which will often need to be undertaken by a forensic accountant and it is rarely, if ever, appropriate for directors to rely on their own valuation of the business.

What happens to assets when a business closes?

It depends on why and how the business closed. If the closure involved liquidation or administration, assets are usually sold, transferred or otherwise distributed to the creditors, whereas any onerous assets are often disclaimed or left in the company upon dissolution.

How can you protect personal assets from business creditors?

When the business is set up, and before it takes on finance and other commitments, directors need to be careful to take appropriate advice, particularly if they are asked to give personal guarantees. As the business progresses, the best way to protect personal assets is to comply with any and all statutory and contractual obligations. If in any doubts, seek professional advice at an early stage from accountants, insolvency practitioners, or specialist solicitors.

What is a creditor in business?

A creditor is a company or person owed money by another company or person. Creditors can be secured, preferential or unsecured. Creditors can also be future creditors (owed a sum of money at a future date) and contingent (will be owed a sum of money if something does or doesn’t happen) – future and contingent creditors are relevant to insolvency procedures and their approval.

What do you mean by corporate restructuring?

Corporate restructuring is a broad term referring to a range of options for dealing with problem debt from changing the structure of a group of companies or how their company holds its assets through to the negotiated release or deferral of liabilities and to a statutory restructuring under the Corporate Insolvency and Governance Act 2020. Formal restructuring, which in principle allows certain classes of creditor to receive enhanced returns over others are very rare and tend to be the preserve of very large and/or complex corporate groups.

What is corporate debt restructuring?

Corporate debt restructuring involves compromising and reducing the overall levels of debt by agreement, or extending the period over which a debt is paid. This can be done in a number of ways from informal time to pay agreements with trade creditors, to highly technical cross class cram down restructurings.

How we’ve helped our clients

“The team at Paris Smith are true experts; thorough and detailed, whilst maintaining balance on risk and commerciality. They approach each assignment holistically and pragmatically in driving towards the optimum result for their client.”

Ed Thomas, Director – Mazars UK

Chambers and Partners Legal Directory 2022

The Corporate Restructuring & Insolvency team regularly tackles a variety of contentious and non-contentious matters, such as the sale and purchase of distressed assets including residential and commercial real estate. Notable for its work in the leisure, retail and financial services sectors. Works for a range of local and national organisations, as well as individual directors and trustees in bankruptcy.

An interviewee reports: “They are knowledgeable in their speciality, professional in their approach and consistent in their delivery,” adding: “Their communications are consistent and efficient.

Notable Practitioners :

Mike Pavitt is a distinguished practitioner with a strong practice handling the full range of corporate and personal insolvency matters. He is adept handling pre-pack sales.

Legal 500 2022

Mike Pavitt leads Paris Smith LLP’s corporate restructuring and insolvency practice, which serves a diverse client base including companies, lenders directors and other individuals. The firm is also highly regarded by insolvency practitioners, as is evidenced by the fact that it generates a strong flow of referrals from KPMG, RSM and Quantuma, among various others. Pavitt, who has focused almost exclusively on insolvency since qualifying as a solicitor in 1999, undertakes a mix of contentious, non-contentious and technical advisory work. In 2020, he advised the joint liquidators of Kinsale Construction LLP on prospective claims against two former members, one living and one deceased, for an account of assets, transactions and actions undertaken by them in respect of the business’s final period of trading.

Sources say:

  • “I always know and take comfort that when I engage with the team I will get solid legal advice. It is so important these days and often key when looking to achieve a recovery for the benefit of creditors”
  • “Headed by the hugely experienced Mike Pavitt, the team covers all aspects of insolvency law, both contentious and non-contentious. Now also act for litigation funders”
  • The insolvency team are accessible and down to earth; providing timely, relevant and sound advice. They explain in plain terms the consequences of any courses of action and provide realistic solutions and clear advice”
  • “The team has a strong technical knowledge for both contentious and non contentious matters. It is well supported by a wider practice”
  • “The team at Paris Smith, ably led by Mike Pavitt, provides a responsive, value for money service. Instead of just saying they are client-focused, they demonstrate this in all they do”

Corporate Restructuring & Insolvency Resources


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