Paul Reeves Speaks to Accountancy Age About Avoiding Insolvency During a Crisis

Paul Reeves, Managing Director in Duff & Phelps’ Global Restructuring Advisory practice, spoke to Accountancy Age about how to avoid insolvency during the coronavirus pandemic.

Insolvency has become a major threat to many businesses across the UK, however, the UK government is attempting to keep this to a minimum by introducing schemes and measures such as the Coronavirus Job Retention Scheme (CJRS) to provide small and medium-sized enterprises (SMEs) with cash flow during this period.

Paul commented, “Businesses are asking about the Coronavirus Business Interruption Loan Scheme (CBILS), protective measures such as CVAs to help spread the payment of bills over a longer period and also guidance on the workings of the furlough procedure.”

Paul also warns that businesses will face the greatest risk when the economy begins to reopen.

“The relaxation of lockdown measures may be the riskiest for any business as the economy restarts and suppliers are more likely to want early repayment as they battle their own issues.” Paul suggests winding up petitions should be placed on hold to avoid an increase in insolvencies. “A moratorium on the ability of creditors to petition for the winding up of a business but with directors’ liability returning to include wrongful trading…should provide conscientious directors some breathing space to enable them to restart their own business” Paul concluded.

Read the full article here.