Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Farming Insolvency in England and Wales: Structures, Security, Enforcement Options, and Operational and Regulatory Considerations for Lenders and Insolvency Practitioners

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

This Practice Note

This Practice Note reviews how farming enterprises are structured and financed, the forms of security they may grant, and the enforcement avenues open to creditors. It also examines the risks and considerations before commencing enforcement within the agricultural sector (including matters tied to a lender’s collateral); the operational and practical challenges on the appointment of an insolvency practitioner, and the factors relevant to deciding whether trading should continue. The UK farming sector covers roughly 70% of the nation’s land and helps preserve landscapes of cultural significance. The sector is commonly divided into three principal areas: dairy, arable and livestock. Of total farmland, about 70% is owner-occupied, with the remainder let to tenants. Many farmers rely on subsidies to keep operating. For some, as much as 50% of their receipts are subsidy payments, leaving smaller holdings especially exposed. Agricultural insolvency levels have been comparatively low over the past two decades due, in part, to rising agricultural property values; support from the EU via the Common Agricultural Policy (CAP); and low interest rates. These comparatively low figures reflect firmer agricultural land prices, sustained CAP support within the EU framework, and prolonged periods of historically low interest and borrowing costs. However, in...

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Stephen Allinson

Stephen has specialised in credit, debt and insolvency work since 1987, and has extensive experience in dealing with the full range of these procedures. Prior to setting up his own consultancy, he was a Business Recovery and Insolvency partner at a major law firm. As well as acting as a Consultant to the legal profession, he also pursues many other projects in the legal, insolvency and credit fields and is a Visiting Lecturer at the University of Law.As well as being a Solicitor Licensed Insolvency Practitioner, he is an Associate Member of the Association of Property and Fixed Charge Receivers. Stephen was appointed Chairman of the Board of The Insolvency Service in January 2017 and is also the Chairman of the Joint Insolvency Examination Board (JIEB); the Deputy Independent Examiner for the Institute and Faculty of Actuaries and one of the Chairmen of the...

Web page updated on 21/05/2026

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