Hotels and hospitality businesses around the UK have been severely affected by the coronavirus pandemic, which continues to cause widespread disruption and long-term financial issues.
Although the summer of 2020 saw hospitality businesses reopening, this was a narrow window of trading that for many was insufficient to stop the downward financial spiral. If you operate in the hospitality sector or own a hotel, you should seek urgent liquidation advice from a licensed insolvency practitioner (IP) to find the best way forward.
The uncertainty over future restrictions, often imposed at short notice, as well as concerns over picking up the virus, are likely to have contributed to low booking numbers overall. Business travel has also considerably reduced, as companies use technology for meetings and conferences rather than travelling.
Early professional insolvency advice is crucial when business has been so badly affected - liquidation is one potential avenue, but there could be other options. If your business is restructured, for example, it may be able to carry on without the elements that were making it unprofitable. Streamlining and simplifying a business can create the lighter, more agile structure that’s better able to deal with difficult trading conditions such as these.
UK Liquidators can provide the reliable professional advice you need if your business is struggling. We’ll clarify your current financial position and clearly present your best options so you can take action with confidence.
If liquidation and closure is the only choice, a Creditors’ Voluntary Liquidation (CVL) process should be followed. This ensures your business is closed down according to statutory insolvency laws, and protects you from allegations of wrongful trading.
Although clearly not the best outcome, entering into a CVL would allow eligible staff to claim redundancy pay. If you’ve worked as an employee of the company, you may also be able to claim redundancy as a director.
As a company director you can decide when to place your business into liquidation, and also choose your own liquidator. As Creditors’ Voluntary Liquidation is a formal procedure, only a licensed insolvency practitioner can carry it out.
In brief, the liquidator will have the company’s assets professionally valued, and then sell them at auction. Following the sale, all proceeds are distributed amongst creditors in the statutory order.
Any debts that remain at the end of this process can be written off under a CVL, unless a personal guarantee has been provided. In this case, you’d be personally liable to repay the outstanding borrowing.
As we mentioned earlier, as a company director you may be able to claim redundancy pay and other statutory entitlements when you liquidate your company. The eligibility criteria include:
Don’t forget, however, that liquidation may not be your only option - there might be steps you can take to save your company.
Our expert team at UK Liquidators will identify any rescue or recovery measures that are appropriate for your hotel or hospitality business. One such option might be to restructure your debts within a formal agreement called a Company Voluntary Arrangement (CVA).
It may also be possible to streamline the business so you can carry on trading without the elements that were exacerbating your financial decline. Although restructuring might involve staff redundancies, the resulting business would be better able to deal with the extreme challenges of today’s pandemic world.
If you would like more trustworthy liquidation advice for your hotel or hospitality business, please contact one of our partner-led team at UK Liquidators. We can offer you a free, same-day consultation to quickly assess your present position and best options. We operate an extensive network of offices throughout the UK.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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