the "vanishing" business?
The experience of insolvency practitioners in the last major
recession in the early 1990s was one of asset realisation; whether
that was the sale of (often freehold) properties or valuable
equipment or the collection of book debts. However, over the
last 20 years there has been a gradual shift in the way in which
businesses are financed so that freehold properties have been
replaced with (often onerous) tenancies, equipment is invariably
leased and book debts have been discounted or factored.
It could be said that as a consequence many
businesses have "vanished" with the result that by the time a
failed business falls to be administered by an insolvency
practitioner the remaining assets are either worthless or very
difficult to realise. However, insolvency practitioners need
to find a cost effective way to realise these assets for the
benefit of creditors since if they're not able to do so it may be
that they will no longer have a role to play.
Against this background we were delighted to
use the R3 Southern Region Winter meeting
to host a discussion on the role of insolvency practitioners in
reality the only assets that remain in many businesses; namely
intellectual property rights and claims against those who may have
wrongly benefited at the expense of a business's creditors.
There were presentations entitled: 'Realising intellectual
property rights: IP for IPs' from Julia
Clark, a specialist intellectual property barrister at Hogarth
Chambers, Lincoln's Inn; 'Making claims work' from
Dan
Geddes from Blake Lapthorn's Insolvency and Business Recovery team and
'Funding claims: the insurance perspective' from Sergei
Purewal, senior underwriter at Firstassist Legal
Expenses. The session was jointly chaired by Adrian
Owen of Blake Lapthorn and
James Stares of Grant Thornton.
It was clear from the debate that the
presentations had provided considerable food for thought and that
the insolvency profession needs to continue the debate about what
assets are available for creditors and how these can be realised in
a cost effective manner. The Insolvency and Business
Recovery team at Blake Lapthorn will continue to
participate in and monitor that debate and we look forward to
updating you as and when there are further developments.
