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A recent press release from R3 highlights the important yet often neglected area of Members Voluntary Liquidations (MVLs). In a recent press release Mr Stephen Laws, President of the association, noted:
"Unemployment and business insolvency statistics are also usually closely related, but conversely last weeks’ corporate insolvency statistics showed a slight dip, rather than the expected rise. One reason for this is the fact that business owners are choosing to enter into Membership Voluntary Liquidations (MVLs), rather than waiting to be hit by formal insolvency. MVLs are not recorded in the insolvency figures as they are not an insolvency procedure, but figures show that there were close to a quarter (23.9%) more MVLs in the first three months of 2010 compared with the same period last year. If not choosing that route, many businesses have been forced to “streamline” their workforce in order to continue trading, hence an increase in unemployment."
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...