Events company liquidation advice

The events sector was severely affected by coronavirus from the start of the pandemic, and continues to experience extreme financial distress. The Covid-19 vaccination programme does offer hope that the economy will open up fully very soon, but it may already be too late for events companies that have been unable to operate in any form for more than 12 months.

The ever-changing restrictions on trading – the numbers that can attend events such as weddings, for example – have made it impossible to plan ahead. This has created huge uncertainty and an impossible trading environment for events companies, regardless of size. 

The ripple effect is also significant, with individual creative artists and performers, freelance tour managers, actors, and catering staff, as well as the venues themselves, experiencing cancellations and postponements across the board.

Professional liquidation help for events companies

It’s crucial to obtain reliable liquidation advice to clarify your options if you’re in the events sector, and to ensure you meet your legal obligations to creditors. Directors of any company in insolvency must prioritise their creditors’ interests, and adhere to the strict rules of insolvency in the UK.

This means ceasing trade immediately they become insolvent. It the falls to licensed insolvency practitioners (IPs) to establish whether business rescue is possible. If not, it’s important to understand what happens next and how liquidation proceeds.

There may be hope for your events company, even in such dire financial straits. Before we look at potential alternatives to liquidation, however, what happens when your events company is liquidated?

Events company liquidation

Liquidation may be the only option left for your events business, in which case you’ll need to enter Creditors’ Voluntary Liquidation, or CVL. This is a formal process undertaken by licensed insolvency practitioners, and ultimately results in business closure.

By entering into liquidation voluntarily you protect your creditors from further losses, whilst also meeting your statutory obligations as a company director. Liquidation involves selling all business assets for the benefit of creditors, with remaining debts being written off. 

It must be noted that, if you’ve provided a personal guarantee for any business borrowing, the loan won’t be written off and you’ll have to repay the lender - if you can’t repay, you may be able to secure redundancy as a director.

Redundancy pay for events company directors

If you’ve worked under a contract of employment for at least two years, and receive a regular salary through PAYE, you may be eligible to claim director redundancy and other statutory entitlements.

UK Liquidators can provide further advice on eligibility for director redundancy, and with the current average claim being £9,000, this could provide the means to pay for the CVL process and/or repay a personal guarantee.

Is it possible to rescue or sell my events company?

Several options may be available that could rescue your company and enable it to trade again when restrictions are lifted. These options might include:

• Informal or formal renegotiation of debt – your creditors may be willing to agree new repayment terms so that financial pressure on the company is reduced. If negotiations are encapsulated within a formal instalment plan, known as a Company Voluntary Arrangement (CVA), the agreement is legally binding on all parties. There is also a Fast Track CVA option for eligible companies, which speeds up the process.
• Company administration – placing the company into administration could be a good option if you require respite from creditor pressure in order to formulate a plan – company administration offers an eight-week moratorium where no legal action can be started or progressed.
• HMRC Time to Pay scheme – if your events company has a good history of filing and payment with HMRC, it may be eligible for a Time to Pay (TTP) arrangement. This can offer up to 12 months’ extra time to pay your tax arrears, reducing the threat of HMRC issuing a winding up petition against the company.
• Selling your events business - if your events company owns high value assets or is viewed as viable for the future, you may be able to sell it in its entirety, or sell the underlying assets, to a third party. This would allow it to continue trading under new ownership, and the associated transfer of employment contracts under TUPE regulations would mean some or all jobs were retained.

UK Liquidators can provide a professional assessment of your business’ financial situation, and offer clear, reliable events company liquidation advice. Please contact one of our licensed insolvency practitioners to arrange a free, same-day consultation.