Which is the best commercial recovery method?
Company insolvency is a serious situation for any business. Various ways can be used to deal with insolvency either helping the business recover or closing it to minimize the level of damage to creditors interests. The first method involves appointment of accountants by a bank to oversee the running of the business under the powers reserved to it by its debenture. This is known as receivership and it is rarely used as a commercial recovery method. Another method is putting the business in administration. This method has become very popular in the last two or three years. This is because it allows the business to utilize the pre-pack procedure, which allows the business to be sold to a third party before the insolvency procedure starts. This helps retain the company’s image, retain value for creditors and jobs for the employees. If these commercial recovery methods fail, the company has to be liquidated to allow the creditors recover some of their money through the sale of company assets.