Seven companies promoting ‘corporate rescue’ scheme shut down after undermining insolvency regime

Two connected corporate rescue firms, Atherton Corporate (UK) Ltd and Atherton Corporate Rescue Limited, have been shut down for misleading directors of struggling businesses. These firms falsely claimed to offer a "legal alternative to using insolvency practitioners," encouraging directors to sell their distressed companies while retaining assets and avoiding debts. This scheme was designed to sidestep the formal insolvency process, undermining the integrity of the insolvency regime.

Misrepresentation and Fraud

The Atherton companies lured directors by suggesting they could resign from their companies before formal insolvency proceedings and thereby avoid reputational damage. They misrepresented their services, claiming that directors could transfer company liabilities to new buyers and continue trading under a new company name without facing any consequences. This included misleading advice that the distressed company's records could be disposed of, and access to bank accounts could be maintained despite financial difficulties.

These practices not only misled directors but also posed a significant threat to the integrity of the insolvency process. By encouraging directors to shirk their responsibilities, Atherton Corporate actively worked against the established insolvency framework, which is designed to protect creditors and ensure that the insolvency process is conducted fairly and transparently.

Impact on Genuine Insolvency Practitioners

For genuine, licensed insolvency practitioners, cases like this are damaging. Such unethical practices create a mistrustful environment, making it harder for reputable professionals to gain the trust of directors in need of legitimate financial advice. Licensed practitioners adhere to strict legal standards and aim to provide clear, honest guidance to help companies navigate difficult financial situations.

Seeking Professional Advice

Directors facing financial distress should seek advice from professional, licensed insolvency practitioners like AABRS. Unlike unlicensed operators, licensed practitioners are bound by legal and ethical guidelines, ensuring that directors receive honest, accurate advice that helps them address their financial difficulties responsibly. AABRS can assist directors in understanding their options, whether through restructuring, formal insolvency procedures, or other appropriate measures, ensuring they comply with legal requirements and protect their interests.

In summary, this case underscores the importance of relying on licensed professionals in times of financial distress and the serious consequences of engaging with untrustworthy firms that promise quick fixes.

Source: Companies promoting ‘corporate rescue’ scheme shut down after undermining insolvency regime - GOV.UK (www.gov.uk)