Companies and their directors are facing an array of financial challenges not seen for many decades. The combination of rising energy prices, wider inflationary pressures, supply chain issues, skills shortages and rising interest rates are creating difficulties for many companies. Whilst company insolvency is never an option directors want to consider, it is a reality that an increasing number of companies are facing.

At PwC, we have a long heritage of delivering corporate insolvency solutions successfully and in a way that shows we care. We appreciate that insolvency can be very challenging for everyone impacted and requires a sensitive approach. We are incredibly proud of the feedback we regularly receive on this and the results we deliver on all sizes of business. For instance, in H1 2022 we preserved 27,000 jobs and returned £113m+ to creditors.

This combination of deep experience and a caring approach means we are able to tackle the range of issues that a company, its directors and employees have to deal with effectively and with confidence. We focus on respectful collaboration, with management utilising their knowledge of the business alongside our sector and situational experience to ensure that we maximise recoveries for creditors and minimise cost.

Why is this important? Because it means we can help directors to navigate their legal obligations and at the same time deliver better returns to creditors and minimise loss. We are always mindful of the upheaval insolvency can cause to employees, customers and suppliers.

Insolvency is frequently used as a mechanism to restructure a business and some of the common processes you may have heard of are:


Administration is a process designed to hold a business together while plans are formed either to put in place a financial restructuring to rescue the company, or to sell the business and assets to produce a better result for creditors than a liquidation. It can be used where neither of these objectives can be achieved, simply as a mechanism to liquidate assets and distribute the proceeds to secured or preferential creditors, but this is not the primary purpose of administration.

Pre-packaged administrations (pre-packs)

Pre-pack is a shortened form of the phrase ‘pre-packaged administration’. A pre-pack is a deal to sell the assets of a failed company, agreed prior to insolvency, which is completed almost immediately after the appointment of administrators (or occasionally receivers).


A post pack is a form of sale process normally undertaken as part of an administration where the administrator still benefits from having a pre-negotiated guaranteed outcome on appointment, but a marketing process is run following the appointment to determine if a better outcome for creditors can be achieved from a sale to a different party.

Administrative Receivership

An administrative receiver is appointed under a floating charge or debenture which covers the whole or substantially the whole of the company's assets, including its goodwill. Insolvency changes introduced in September 2003 have restricted the ability of floating charge holders to appoint administrative receivers to situations where the debenture was taken out pre 15 September 2003.

Company voluntary arrangement

A CVA is effectively a 'deal' between a company and its creditors for repaying in full, or in part, the liabilities of that company. It involves a renegotiation by a company of the payments due to its creditors (often involving them accepting less than the full amount due to them) or some other form of financial restructuring. The 'deal' requires the approval of 75% of creditors present and voting at a meeting summoned to approve the proposals.


Liquidation is used in situations where the company cannot meet one of the tests for administration or where the company cannot be salvaged and instead the business needs to be closed and the assets realised. There are two main types of liquidation: A creditors voluntary liquidation where the company asks the creditors to appoint a liquidator; and a compulsory liquidation where creditors force the liquidation of the company through a court process.

Schemes of Arrangement

A Scheme is a compromise or arrangement under Part 26 of the Companies Act 2006 between a company and its creditors (one or more classes of them), which becomes legally binding on all creditors (or the relevant class or classes) if the necessary majority of creditors vote in favour and the Court approves it.

Restructuring plan

A Restructuring Plan is another form of creditor compromise. It requires the sanction of the court following two court hearings to examine class composition, jurisdiction and fairness amongst other considerations: First to convene creditor meeting(s) (the Convening Hearing); and second, to sanction the Plan (the Sanction Hearing). A company looking to use the Plan must have encountered or be likely to encounter financial difficulties, with the Plan designed to address those difficulties.

The threshold for a class to approve a Plan is 75% in value of those present at a class meeting. It also has the ability to cross-class cram down, which means the court is able to sanction a Plan even if there is a dissenting class (or classes), provided that (i) none of the members of the dissenting class(es) would be any worse off under the Plan than they would be under the relevant alternative and (ii) at least one class that has a genuine economic interest in the relevant alternative has voted in favour.

Fixed charge receivership

A fixed charge receivership is where a receiver is appointed by a secured lender who holds a fixed charge. The appointment of the receiver and their powers are set out in the security documents and the deed of charge. There is also a concept of a Law of Property Act Receiver. An LPA receiver is appointed over property and is normally appointed pursuant to Section 101(1) of the Law of Property Act 1925 (the LPA) which gives a mortgagee of land the remedy to appoint a receiver over that land.  

Chapter 11

This is a US reorganisation process. The key feature is that the company remains in control of business and operates as a going concern in the ordinary course. There is an automatic stay of all claims and litigation. The company has 120 days from the date of bankruptcy filing to file a plan of reorganisation, which in essence is a compromise and refinancing plan. The company can reject contracts and leases that have unfavourable economic terms.  

Recognising that you need help is one of the hardest decisions any management team will have to make and we are here to support you when you are ready to talk. We recognise many of these options and processes may be unfamiliar to directors. Using our experience and collaborative approach, we can support management teams in navigating and leading these different insolvency options.

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Lehman Brothers

The largest, most complex and successful insolvency in history.

Lehman Brothers were the fourth largest investment bank, and their collapse was one of the defining moments of the 2008 financial crisis. PwC were appointed as administrators.

A myriad of new legislation and new powers of intervention built directly from the lessons learned as a result of the Lehman administration. Our partners, staff, legacy Lehman people and specialist advisors have made a significant global impact on subsequent insolvency matters, regulators, central banks and governments.

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100p/£1 returned - £36bn of cash and assets. And a further £7bn surplus.

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David Kelly

David Kelly

Restructuring and Insolvency Partner, UK Head of Insolvency, PwC United Kingdom

Tel: +44 (0)7974 332659

Ed  Macnamara

Ed Macnamara

Partner, Head of Restructuring, PwC United Kingdom

Tel: +44 (0)7739 873104

Jane Steer

Jane Steer

Partner - Mid Market Services, North East & Yorkshire, PwC United Kingdom

Carla Matthews

Carla Matthews

Partner - Head of Contentious Insolvency & Asset Recovery, PwC United Kingdom

Tel: +44 (0)7483 365547