How insolvency support works
A NIFA member can review accounting records, bank statements, transaction histories, valuations and company information to assess financial activity before or during insolvency. The expert can trace funds, quantify losses, consider solvency issues including whether and when a company became insolvent, and prepare evidence for claims, investigations or settlements.
Where litigation is involved, a NIFA member can also provide independent expert opinion on the financial position and stability of a party, including its ability to fund the expected future costs of proceedings where an application for security for costs has been made.
Members can be appointed in an advisory capacity or as expert witnesses, including as Party Appointed Experts or Single Joint Experts, depending on the circumstances of the matter.
Who insolvency expertise is for
Insolvency support is for insolvency practitioners, solicitors, creditors, directors, office holders, insurers and businesses involved in disputes or investigations where independent financial analysis is needed.
NIFA members have experience acting for insolvency practitioners appointed by a company, companies themselves and directors of insolvent companies or businesses in financial distress. Their independent expertise can be particularly important where an insolvency practitioner is pursuing a claim against directors or third parties and separate expert opinion on matters such as company solvency is required.
When insolvency expertise can help
NIFA members are experienced in providing expert opinion in relation to a wide range of insolvency related matters, including:
- Whether a company is insolvent and at what point it became insolvent
- Litigation funding in the context of insolvency proceedings
- Claims against insolvency practitioners including negligence and excessive remuneration
- Transactions at an undervalue
- Preferential treatment of creditors
- Wrongful trading
- Fraudulent trading
- Directors’ misfeasance claims
- Business valuations in the context of a distressed sale
- Security for costs applications, including assessment of a party’s financial position, stability and ability to fund the expected future costs of proceedings
- Investigation and asset tracing where recovery of cash or other company assets is required
Insolvency process and outcomes
The process usually begins with a review of the insolvency issue, available records and intended use of the expert evidence. The forensic accountant then analyses the financial information, considers the company’s financial position at relevant points in time, identifies transactions or issues requiring explanation and prepares findings in a clear report.
Depending on the instruction, this may involve assessing when insolvency occurred, considering the financial impact of directors’ actions, tracing assets, reviewing transactions or assessing a party’s financial capacity in connection with litigation.
The outcome is evidence that can support investigation, recovery action, negotiation or litigation strategy and help insolvency practitioners and their advisers assess options for recovering value for creditors.
Why choose a NIFA member for insolvency matters?
NIFA brings together independent forensic accountants who understand insolvency disputes, investigations, litigation support and expert witness duties. Members understand the importance of maintaining independence and objectivity, particularly where separate accounting expert evidence is required on issues such as the solvency of a company.
With backgrounds in general accountancy practice, members can draw on practical commercial experience alongside expertise in related areas of forensic accounting, including fraud investigations and asset tracing. This enables them to provide clear, robust advice in complex insolvency matters.
Members work with clients and their legal advisers to provide independent expert evidence that is fit for purpose and proportionate to the matter, with value for money particularly important in insolvency proceedings where maximising returns to creditors is a key consideration.
Legal professionals and insolvency practitioners can use NIFA to identify a suitably experienced specialist, while members benefit from shared resources, training, referral opportunities and annual quality review.
To find a forensic accountant with the insolvency expertise your matter requires…
FAQs
Without early forensic accounting input, key transactions may be harder to trace, financial records may be incomplete and recovery opportunities may be more difficult to assess. Early analysis can also help establish the company’s financial position at relevant points in time, identify transactions or conduct requiring further investigation and assess potential routes for recovering value for creditors.
Yes. NIFA members can provide expert opinion on whether a company was insolvent and the point at which insolvency occurred. This can be relevant to claims involving issues such as wrongful trading, fraudulent trading, directors’ misfeasance or particular pre-insolvency transactions.
Yes. Where an application for security for costs has been made, a NIFA member can provide expert opinion on the financial position and stability of the relevant party and its ability to fund the expected future costs of the proceedings.
NIFA members can act for insolvency practitioners, companies and directors of insolvent companies or companies experiencing financial distress. They may be appointed in an advisory capacity or as an expert witness, including as a Party Appointed Expert or Single Joint Expert.
Contact NIFA with the insolvency issue, the records available and the purpose of the expert input so the most relevant forensic accounting expertise can be identified.
Our recent insolvency work
NIFA members regularly support insolvency-related disputes involving transaction review, valuation, loss, fraud and director conduct.
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