The cancellation of Kendal Calling, a well-known live music event in Cumbria, has been attributed to the lack of government guidance. The pandemic has caused a severe impact on the festival and live music industry, leading to significant financial losses.
Restrictions imposed by the government have left festival and live music companies unable to take any steps to improve their financial situation and are at a high risk of going bankrupt.
If your live music or festival business is facing financial difficulties, InsolvencySupport.co.uk can offer professional and independent advice on potential options available.
Trials through the Events Research Programme
While the Events Research Programme offers some live event companies the ability to plan with confidence, not all are selected for the “test events” program. The delay in releasing the results of the Events Research Programme further exacerbates the uncertain future for festival and live music companies.
Absence of Government Insurance for the Industry
The absence of a government-supported insurance program for cancelled events is causing businesses to endure ongoing financial losses, not only from lost revenue but also from the upfront expenses incurred before an event occurs.
Insolvency Liquidation Information for Festivals and Live Music Companies
If saving your business is not a possibility, it is crucial to understand the liquidation process and the challenges you may face as a company director. Creditors’ Voluntary Liquidation (CVL) is a formal procedure that must be managed by authorised insolvency practitioners (IPs).
Choosing to enter liquidation voluntarily enables you to fulfil your duties as a company director and provides additional advantages. You can pick your own liquidator and schedule the liquidation, but a significant consideration is that you may become eligible for director redundancy.
Understanding Insolvent Liquidation
Liquidation involves the winding down of your business by the IP and removal of the company’s name from the Companies House registry. The IP will sell all business assets in a liquidation auction and use the proceeds to repay creditors.
Since the company is insolvent, not all creditors will receive repayment and it is uncommon for unsecured creditors to receive anything from the asset sale. Any remaining debts after the process will be discharged.
Impact of Liquidation on Company Directors
It is essential to prioritise the interests of your creditors if your business becomes insolvent. If you fail to do so, you may be at risk of allegations of misconduct or wrongful trading after the liquidator’s investigation.
If a creditor initiates the liquidation process, it may result in increased financial losses for creditors as a whole, which is in violation of UK insolvency laws. This could lead to your disqualification as a director for up to 15 years or even personal liability for the additional debts owed by your creditors.
Voluntarily entering liquidation enables you to prioritise your creditors and, as previously mentioned, may make you eligible for director redundancy pay.
Redundancy for Directors in Liquidation Scenarios
If you have been employed under a contract with the company for a minimum of two years and receive a salary through PAYE, you may be eligible for director redundancy. InsolvencySupport.co.uk can determine your eligibility and provide customised liquidation advice for your festival or live music company. They offer free, same-day consultations and have a network of offices throughout the country.