Insolvency Act 1986
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Insolvency Act 1986see INSOLVENCY.
Insolvency Act 1986a UK Act that sets out the procedures for dealing with insolvent companies (see INSOLVENCY). This involves a number of possible steps:
- a voluntary arrangement under which the company and its creditors agree to a schedule of reduced or delayed debt repayments. If the company continues to make losses, then, (b) the company may ask the bankruptcy court to appoint an administrator to try to reorganize the company and rehabilitate it. If the administrator is unable to revive the company, then, (c) he will put the company into receivership, selling company assets to pay off creditors;
- should the company continue to deteriorate, the administrator will wind up the company, adopting the role of liquidator and selling off remaining company assets and using the proceeds to pay back creditors, with ORDINARY SHAREHOLDERS receiving any funds that remain.