Sometimes, you may first learn about business insolvency in the news. It must be advertised by the Insolvency Preactitioner  in "The London Gazette". If you hold shares in your own name, you may receive information directly from the company.

You may be asked to vote on the plan of reorganisation, although you may not get the full value of your investment back. In fact, sometimes shareholders don’t get anything back, and they don’t get to vote on the plan.

If you are entitled to vote, you should receive from the IP a copy – of the proposal;

* details of creditors’ entitlement to vote; * a proxy form for voting purposes; * and notice of the date for the meeting of creditors. WHAT WILL HAPPEN TO MY SHARES?

When the matter is concluded, if you are a shareholder, you may receive new shares in exchange for your shares. If you are a shareholder the Administrator may ask you to send back your shares in exchange for shares in the reorganised company. The new shares may be fewer in number and be worth less. The proposal will spell out your rights as an investor, and what you can expect to receive, if anything from the company.

WELL, AT LEAST I GET SOMETHING, RIGHT?

Not necessarily. The Administrator may determine that shareholders don’t get anything because the debtor is insolvent. (A debtor’s solvency for this purpose is determined by the difference between the value of its assets and its liabilities). If liabilities are greater than assets, your shares may be worthless.

WELL CAN I AT LEAST GET A TAX DEDUCTION?

Perhaps. Contact your accountant or the Internal Revenue ("the IR") for information about how to report worthless securities as a loss on your income tax return. If you don’t know whether your shares have value, and you can’t find a share price in the newspaper, ask your broker or the company for information.