Rising Interest Rate Hedging Product (IRHP) costs could be a significant contributing factor to a company being forced into administration, and indeed in some cases can mean the difference between solvency and administration.
An IP has a legal obligation to maximise the value of the businesses’ assets for the creditors, and therefore it is important that the IP looks into any swap agreements taken out by the business in its recent history to ensure that there is no significant value in any potential claim for mis-selling, and also that the interest rate hedge has been correctly valued. The opportunity cost of seeking expert advice early on in such a complex matter is small given the likely benefit.
Even if the IRHP expired before the company went into administration, or the company is now in administration, the sale may be covered under the Financial Conduct Authority’s redress review. In either of the above situations we would suggest you seek further advice as soon as possible. It should be noted that the IP will not suffer adverse costs should the revision fail. AHV can provide an initial review without obligation.
Contact us for an initial appraisal and we will recommend the appropriate course of action, all on a no-obligation basis.