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Published 25 May 2021
This article deals with the effect on claims, both pre-litigation and post, which are driven by Credit Hire Organisations (CHOs) who are insolvent or begin an insolvency process. We have focused on practical considerations to identify such claims as well as what you will need to bear in mind when handling credit hire claims where the CHO is insolvent.
There are three main strands: -
Dissolution: involves voluntarily striking a solvent company off the register at Companies House.
Insolvent: where a company is either unable to pay its debts as they fall due or where the value of the company’s assets is less than the amount of its liabilities.
Administration: an insolvency process which allows for the reorganisation of a company or the realisation of its assets in order to achieve one of the statutory purposes of administration.
Liquidation: another insolvency process whereby the assets of a company are realised and distributed to creditors in satisfaction of the debts that they are owed and in the order of priority set out in the Insolvency Act 1986.
Winding up: involves ending all business affairs and includes the closure of the company. Winding up is the process that leads up to the dissolution of a company
Bankruptcy: a legal process applicable to individuals and not companies, where the bankrupt’s estate is realised and distributed by a trustee.
Before validating and paying a payment pack, it is important to check the status of the CHO. To do this you can:
There are 3 main aspects to consider when dealing with such claims: -
Should you wish to discuss this in more detail please contact:
+44 (0) 121 698 5309
London - Walbrook
+44 (0) 207 894 6886
+44 (0) 121 698 5275
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