A PVO is similar to an Administration for a Limited Company.
A PVO application can be made if the partnership is insolvent and has carried on business in England or Wales within the past three years.
The purpose is to protect the partnership whilst a restructure, refinance or sale is considered.
A Statement of Affairs for the Partnership must be prepared and the partners can then apply to court for an order. It is usual for an interim order to be granted to prevent creditors taking any action against the partnership whilst the court considers matters.
At the hearing the court considers the application and whether it should allow the court to grant powers to the Administrator to run the partnership affairs.
Should the court make the order, creditors actions against the partnership are then frozen, and creditors cannot take action against the company without the permission of the Court or the Administrator.
The Insolvency Practitioner will then manage the business in meet the purpose of the Administration.
Copyright Bailams Insolvency Practitioners Limited. 2011.