As in the United States, the economic crisis in the United Kingdom has created severe distress for companies and forced some to make difficult decisions. These decisions include entry the possibility of bankruptcy. In the U.K., this can take various forms: (1) “administration,” somewhat akin to Chapter 11 in the U.S., (2) winding up of the company through liquidation, or (3) voluntary member liquidation, as in the recent case of Danka Business Systems (which entered voluntary liquidation following the sale of its primary operating business). The members’ voluntary liquidation is done outside of the insolvency process but may be sought out as companies are forced into asset sales. The U.K. has also seen an increase in the number of pre-packaged administrations. Likewise, prepackaged bankruptcies are appearing more often in the U.S.

Published: February 26, 2009