Wilko story – legal comment

Michael said:

“By the filing of a notice of intention (NOI) to appoint administrators, it is evident that Wilko’s management exhausted both solvent refinancing options and other informal insolvency regimes, such as a CVA (company voluntary arrangement), where creditor support is required. There may even have been creditor pressure that precipitated the filing of this NOI.

“Wilko will now be subject to a moratorium (a freeze on creditors taking action) as the proposed administrators and Wilko’s directors explore whether the business can be rescued as a going concern, the first purpose of Administration, or whether Wilko’s business and assets will need to be realised piecemeal.

“The filing of an NOI is indicative of Wilko’s directors considering that its administration would achieve a better result for its creditors than liquidation. It’s not all doom and gloom as: (i) Wilko is not yet in Administration; and (ii) the Administration regime was created to allow the rescue of businesses.

“Any onward sale has the potential benefit of saving the stores and retaining jobs”.