Legal Director in Insolvency & Restructuring, Vicky Biggs, was invited to speak with BBC Radio Northampton to provide legal insight into the process of Creditors’ Voluntary Liquidation (CVL), following the recent news involving Butterwick Bakery.
The bakery, founded in Corby and well-known for its distinctive bakes, had expanded rapidly in recent years. However, like many businesses in the retail, leisure and hospitality sectors, it has faced sustained pressures from rising costs and shifts in consumer spending habits.
Against this challenging backdrop, Butterwick has taken steps to restructure its operations, keeping two stores open while placing the wider business into liquidation. The decision has been described by the founders as “heartbreaking” but reflects the difficult trading environment many businesses are currently experiencing.
Vicky was asked to explain what a CVL involves and what the process means for staff and creditors.
What is a CVL?
Vicky explained that a CVL is short for Creditors’ Voluntary Liquidation: “A company usually enters a CVL when the directors recognise that the business is no longer viable and, having ceased to operate, it cannot pay its creditors in full.”
In practice, this means that the company is brought to an orderly close under the management of a licensed insolvency practitioner. The practitioner’s role is to take control of the company’s affairs, realise its assets, and distribute funds (where available) to creditors.
Employees’ Rights in a CVL
One of the most pressing concerns raised in the interview was the impact on staff. Redundancies in a CVL can often take effect immediately, leaving employees uncertain about pay and entitlements. Vicky highlighted that employees are not left without protection:
“Employees who have been made redundant have rights to make a claim to the government’s Redundancy Payments Service. This can cover redundancy pay, unpaid wages, holiday pay, overtime, commission and notice pay.”
These claims can be made online, and while there is typically a short waiting period, the Redundancy Payments Service aims to make payments within around six weeks of receiving a claim. Employees are also able to seek free advice from ACAS, which supports workers with information about employment rights.
The conversation also touched on the wider economic backdrop. Vicky explained that insolvencies are becoming more common, particularly in sectors such as retail, leisure, and hospitality:
“We’re seeing more businesses facing financial distress due to a combination of factors – increases in the national living wage, higher employer National Insurance contributions, and the withdrawal of certain business rate reliefs. Against this backdrop, many businesses are struggling to remain viable.”
Whilst the sudden closure has been challenging for Butterwick’s staff, Vicky emphasised the importance of employees understanding their rights and making claims promptly. She also noted the role of insolvency practitioners in guiding affected staff towards the relevant support. Listen to the interview (go to 2hr18)
Contact Our Insolvency Team
If your business is experiencing financial difficulties, or if you have been affected by an employer entering liquidation, our Insolvency & Restructuring team can provide clear, practical advice on the options available.
0161 941 4000
Vicky Biggs
Legal Director
Vicky is a Legal Director in the Insolvency and Restructuring team at Myerson and has been with the firm since 2012. Utilising her commercial litigation experience, Vicky now specialises in contentious insolvency matters, advising insolvency practitioners, directors and individuals in relation to both corporate and personal insolvency issues.
Vicky advises on a wide range of insolvency matters, including claims made by administrators, liquidators and trustees in bankruptcy, director disqualification proceedings, remuneration approval applications, retention of title claims, validation orders, bankruptcy annulment applications and winding-up and bankruptcy petitions.
About Vicky Biggs