This refers to a legally qualified professional, an insolvency practitioner, who has great knowledge in the field of law about bankruptcy.
An insolvent company is either administered or liquidated by an insolvency practitioner so as to achieve maximum returns for creditors through controlled disposal of assets.
Key Features:
- Hold requisite qualifications and membership in professional licensing bodies
- Conduct due diligence to determine company’s financial position
- Devise restructuring strategies or oversee liquidation proceedings
- Communicate with creditors, shareholders and other stakeholders
- Compile reports for regulatory authorities on progress of insolvency matters
Example:
After an apparel retailer faced cash flow issues, its board brought in an insolvency practitioner renowned for successfully negotiating debt agreements to rehabilitate distressed businesses.
Key Takeaways:
Insolvency practitioners play an important role in bankruptcy situations by facilitating an impartial process to resolve outstanding claims in accordance with the law while maximizing returns for all parties involved.