How Insolvency Practitioners Manage Company Assets in the UK

When your company's in financial trouble, one of the biggest worries is what happens to everything you've built. Your equipment, property, stock — the assets that represent years of hard work. It's a valid concern, and you're not alone.

The reality? How insolvency practitioners handle your company's assets can make or break the outcome for everyone involved. Get it right, and there's a chance to salvage value for creditors and potentially save the business.

What Actually Happens to Your Assets?

Here's the thing, most directors don't realise: an insolvency practitioner's job isn't to strip your company bare. Their role is more nuanced than that.

When an IP steps in, they look at your assets through several lenses. First, what's actually worth something? (You'd be surprised how often directors overvalue their equipment or underestimate their property.) Second, what can be protected to keep the business running? And third, how can they squeeze the most value out of everything to pay back creditors?

According to the Insolvency Service, over 25,000 companies entered liquidation in 2023. How assets were handled in most cases determined whether directors walked away with their reputation intact or faced years of personal liability issues.

The process isn't random, either. UK insolvency law — particularly the Insolvency Act 1986 — sets clear rules about who gets paid first and how assets must be valued and distributed.

The Valuation Reality Check

Before anything gets sold or distributed, your assets need proper valuation. This isn't your accountant giving a rough estimate — it's a formal assessment that can determine the entire direction of your case.

"We've seen directors get shocked by asset valuations," explains one licensed practitioner. "Equipment they bought for £50,000 three years ago might only fetch £5,000 at auction. But equally, we've found hidden value in intellectual property or customer databases that directors hadn't considered."

The valuation affects everything. A Creditors' Voluntary Liquidation (CVL) determines how much unsecured creditors might recover. In administration, it helps decide whether the business can be rescued or should be wound down.

What gets valued?

• Property (including any with charges against it)
• Equipment and machinery
• Stock and inventory
• Vehicles
• Intellectual property (trademarks, patents, customer lists)
• Money owed to the company (book debts)

The tricky part? Market conditions matter. Selling restaurant equipment during a hospitality downturn won't get the same prices as selling it when the sector's booming.

Protecting What Matters Most

You might assume that once an insolvency practitioner gets involved, everything's up for grabs. Not necessarily true.

In administration, for example, the goal is often business rescue. That means protecting the assets needed to keep trading — even if some creditors must wait longer for payment. The administrator has breathing space (thanks to the moratorium that stops creditor action) to find a buyer for the business as a going concern.

A Company Voluntary Arrangement (CVA) works differently. Your assets typically stay with the company, but you're committing to a payment plan with creditors. The IP's job here is to ensure you're not hiding assets or favouring certain creditors unfairly.

The warning signs IPs watch for:

• Directors selling assets cheaply to family members before insolvency
• Payments are made to some creditors, while others are ignored
• Equipment "disappearing" from company premises
• New charges are being created over assets when insolvency is looming

Do any of these, and you're asking for trouble. Personal liability claims, potential disqualification as a director, even accusations of fraud — the consequences can follow you for years.

Who Gets What, and When?

This is where it gets complicated, but understanding the order matters if you want to know what might be left after everyone's paid.

The queue looks like this:

1. Fixed charge holders (usually banks with security over property)
2. Insolvency practitioner's costs and expenses
3. Preferential creditors (mainly employees and some HMRC debts)
4. Floating charge holders
5. Unsecured creditors (suppliers, contractors, other trade creditors)
6. Shareholders (if anything's left, which is rare)

HMRC's position changed recently — they're now preferential creditors for certain taxes. This means less money filtering down to ordinary trade creditors, who often recover pennies in the pound anyway.

In 2023, unsecured creditors in compulsory liquidations recovered an average of just 3p for every pound owed. It's not pretty, but it's why acting early — before formal insolvency — can make such a difference.

Your Options Before It's Too Late

Suppose you're reading this because your company's in trouble, you still have choices. The earlier you act, the more control you retain over handling your assets.

Consider these routes:

• CVA: Keep control while agreeing on payment terms with creditors
• Administration: Breathing space to explore rescue options
• CVL: Orderly wind-down that you control rather than creditors forcing
• Informal arrangements: Sometimes, creditors will agree to deals without formal procedures

Each option treats assets differently. In a CVA, they typically stay with you. In administration, they might be sold to fund a rescue plan. In liquidation, they'll be realised to pay creditors.

The key is getting proper advice before you're backed into a corner. Once HMRC starts enforcement action or suppliers put you on stop, your options narrow quickly.

Getting the Right Support

Choosing the wrong insolvency practitioner can cost you dearly. Look for someone who:

• Explains the process clearly (no hiding behind jargon)
• Has experience in your industry
• Can demonstrate successful business rescues, not just liquidations
• Is transparent about costs and likely outcomes
• Actually listens to your concerns about specific assets

Remember, the cheapest quote isn't always the best value. An experienced practitioner might cost more upfront, but could save or recover significantly more of your assets' value.

What This Means for You

The bottom line? How insolvency practitioners deal with company assets isn't just a technical process — it's often the difference between walking away with something or losing everything you've worked for.

If your company's struggling, don't wait until creditors force your hand. The directors who come out best from insolvency situations usually sought help early, understood their options, and chose experienced professional support.

At Nexus Corporate Solutions Limited, we've guided hundreds of UK directors through these challenging decisions. Our licensed insolvency practitioners combine technical expertise with a genuine understanding of what you're going through — because we know it's not just about numbers on a balance sheet.

Take Action Today

The conversation about your company's future might feel daunting, but it's probably not as frightening as you imagine. Most directors tell us that understanding their options actually reduces stress levels considerably.

Don't let uncertainty about asset protection delay the help you need. Every day matters when creditor pressure is building.

Call Nexus Corporate Solutions Limited now for a confidential consultation. Our expert team will carefully review your circumstances, explain how we protect company assets, and help you choose the best path forward. For more details, read our guide on how an insolvency practitioner can stop creditors.

Contact us today — because the right advice at the right time can make all the difference.