Brent Norling

If you're the accounting firm, you're at the bottom of the list.

I'm unsecured, I'm not getting paid.

Yeah, that's the likely expectation I'd set.

What's the difference between secured and unsecured then for the audience?

Yeah, so you can be secured if your trade terms allow for it.

So that gives you security over a very specific collateral that you define.

So if you are supplying a widget, you can have security over that widget and

um you know or a vehicle or an asset um and then there's you know like lenders have general securities that just float over all of the assets of the company which give them a priority over payment from the proceeds of those assets whereas unsecured is you know pretty much just everybody else um who has um advanced credit to the company and not being paid

Yeah, so...

Solvent trading is a real difficult area of law because judges can't even agree on what it is.

If I reflect on Mainzeal, the High Court said the directors breached the reckless trading provisions.

Court of Appeal, three judges disagreed with that.

And in the Supreme Court, five judges agreed with the High Court.

And during that period where it was going through the court system, which was years, it was really hard to advise directors because the goalposts keep moving.

But also, I want to start with that because the law constantly evolves and the law around this is really broad because it wants to capture all different circumstances.

But effectively reckless trading is continuing to trade after the point of insolvency or near insolvency.

So if you get to that point of

near insolvency is the term the courts use.

You need to make what they call a sober assessment of the affairs of the company.

So you need, if you're going to continue to trade, you need a solid plan and it can't be some pie in the sky at, um, and you know, I'll be advising, you know, you need to be talking to accountants who, um, can properly advise on what a, what a plan would look like getting a proper cashflow forecast.