Members' Voluntary Liquidations
Better described as ‘Corporate Simplification’ MVLs are typically used to dispose of a corporate entity once it has come to the end of its useful life, and often as part of a wider restructuring.
Why undertake a members’ voluntary liquidation?
There are many reasons leading a company to need a solvent liquidation, these can most easily be grouped into the following three broad groups,
- Corporate simplification, where a group no longer requires the current number of subsidiary entities
- Managed exit, where a company has either sold all of its business and assets, or has taken the decision to cease to trade
- S110 schemes, where a company is looking to separate its activities into new entities, with or without the option of a cash exit for shareholders
Corporate simplification is of increasing interest to groups of all sizes. Increasing regulation and a greater statutory focus on directors’ duties has lead many groups to consider whether they continue to need all the subsidiaries currently in their structure.
Our work on managed exits has assisted management teams in smoothly winding down a business, or tidying up after a sale of business and assets and providing a maximised return of capital to shareholders. Thanks to our extensive experiences of selling many businesses across many sectors we are able to assist management should they require an accelerated sale process (AMA).
S110 schemes allow companies to make use of the legislation to separate different businesses within one company, or to restructure a business to achieve a clearer operating model. Most often in the recent past this has been used to separate a trading business from any underlying investment assets, for example a freehold property.
How can we help?
Our partners have substantial experience of working with management and shareholders of businesses ranging in size from family businesses to FTSE 100 groups. We focus on delivering the benefits required from any liquidation or simplification programme.
We work alongside management teams and their existing advisors to ensure that all issues are identified and, to the fullest extent possible or desirable, dealt with prior to liquidation.
Once in office as liquidators we bring liquidations to a close as quickly as possible enabling a rapid return of capital to shareholders and the release of management time to concentrate on continuing operations.
We have undertaken a considerable number of MVLs and here are a few examples from our recent assignments,
- working with a FTSE 100 company to help simplify its corporate structure, and unlock trapped inter company balances,
- winding up an investment trust, returning approximately £60 million to its shareholders,
- implementing a S110 type scheme for a Guernsey registered business that wished to offer shareholders the opportunity to exit their investment or remain invested in a similar business, and
- liquidating a number of private companies where the business had either been sold ahead of liquidation or wound down in an orderly fashion.
For an informal free discussion about how we could help you unlock value from your corporate structure, please contact Gareth Morris on +44 (0)7940 733 098, or complete and submit the online form below
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