What Happens If a Company Rescue Plan Fails?

When a company rescue plan fails, directors should reassess the business quickly rather than continue trading without a clear strategy. The next step is to review cash flow, creditor balances, HMRC liabilities, payroll commitments and future income to see whether another restructuring option is realistic. A revised repayment plan, refinancing, a CVA or administration may still be possible in some cases. However, if the company cannot pay debts as they fall due and there is no credible route back to sustainable trading, liquidation may need to be considered. The key is to avoid increasing creditor losses and to base decisions on realistic financial information.

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