That was the year that was

PBC Business Recovery & Insolvency proudly sponsor the SME Northamptonshire Business Awards 2016

How many of you can associate with the question, ”Where did [the month] go?” In fact, it does not seem that long ago since I was looking back at 2015 to see what PBC had achieved, yet here I am doing it all over again!

Obviously 2016 will be remembered for the (Brexit) vote on 23 June 2016. It is clear we have a period of uncertainty ahead of us and there have even been claims insolvency practitioners will be extremely busy as a result.  However, at PBC we believe the economy is generally robust and while there will always be losers, there will also be plenty of winners so no need to panic or allow the media to talk us into a recession.

Despite what the pundits say, insolvency numbers have fell year-on-year for the past three years and insolvency practitioners are all bemoaning the general lack of new instructions. To be fair, PBC have experienced a similar trend, although the amount of professional advisors who recommend our services has continued to expand resulting in another year of growth.

I suppose two key events in 2016 were the launch of the PBC mediation service, which has attracted significant interest from solicitors and barristers alike. So far, the service has a 100% success record in settling disputes including a £1 million negligence claim against another insolvency practitioner!  The other point of note was the acquisition of another insolvency practice, Bottomley & Co who were based in Rugby.  As part of that acquisition the re-branded PBC Bottomley & Co moved its operations to Coventry, which provides further potential for work in a wider geographical area.

How many readers have experienced those moments when you wonder why you are working all the hours available and for seemingly little reward?  I am no different.  However, earlier this year an extract of an independent industry report was sent to us that concluded PBC was the 25th fastest growing insolvency practice in the UK and were one of only 62 practices regarded as strong in the industry.  I have to confess a slight puffing out of the chest with pride.  That preceded thanking the PBC team because it is their terrific team spirit and desire to ensure tasks are undertaken in a timely and professional manner that contributed to this independent conclusion.

Outside of our day job PBC have focussed on two specific areas.  The first is to be sponsors of the Northamptonshire SME Awards.  We are so proud to have been involved and it has to be acknowledged the entries received were indicative of how vibrant business is throughout the county.  Secondly and for very personal reasons for Kym Carvell, PBC have chosen the Ronald McDonald House charity as our charity to support for the remainder of 2016 and for next year.  Oh, before you ask, no it has nothing to do with burgers and a big clown!  Check them out in this article where you can find out more.  Alternatively, speak to Kym at our Northampton office.

Gary Pettit

 

 

 

Can they touch my pension?

Coin Dropping Into Piggy Bank

The title of this piece is the question I am asked regularly by individuals who are threatened with personal insolvency and are (understandably) concerned their personal pension may be used to repay creditors.

Personal pensions used to be an asset that could be realised for the benefit of creditors. Provided the bankrupt was over the age of 50 years a trustee could realise the tax-free lump sum, the annuities or, in many cases, both.  This all changed with the introduction of the Welfare Reform and Pensions Act 1999 (“WRP”) where personal pensions were primarily no longer bankruptcy assets.

What has been long debated is whether a pension ceases to be a pension and becomes income a person is entitled to when they exercise their right to draw down the pension benefits and, therefore fall outside the protective ring of the WRP.

A bankrupt has a statutory duty to cooperate with their trustee and may face serious consequences for failing to comply, including imprisonment. A trustee also has general powers to seek and overturn previous dealings.  For example, back in the early 1990s many matrimonial homes were transferred into the sole name of the non-business owner for the consideration of “Love and affection” and were, quite rightly, deemed void.  These general duties and powers assist a trustee in his duty to maximise realisations for the creditors and the income derived from pension lump sums and annuities provide funds that assist repayment.

In the case of Raithatha –v- Williamson [2012] EWHC 909 these duties were tested when a trustee demanded the bankrupt exercise his rights to receive the benefits of his personal pension and the judge determined the pension benefits did fall within the definition of income.  Bad news for pension holders who could, by way of this decision, be forced to “Retire early” when it came to their pension benefits.

However, on 7 October 2016 the Court of Appeal overturned the Williamson case. In the matter of Horton –v- Henry the judges decided uncrystallised pension rights did not constitute “Income” and neither the court nor the trustee had power to decide how a bankrupt should exercise elections open to them in relation to their pensions.

This decision does appear to be contrary to the general powers and even promotes debt avoidance by pouring money into personal pensions. However, a trustee can challenge excessive pension contributions and, as I proved a few years ago, demonstrate the pension was merely a tool to defraud creditors.  In that sort of scenario a trustee can obtain some (or all) of the pension benefits.

Assuming the Horton case will not be appealed to the Supreme Court the message appears clear.  If you are over 50 years of age then unless you really need the pension benefits resist exercising your rights to receive them until you are discharged from bankruptcy.  Alternatively, if in doubt you should consult an insolvency practitioner or a pension advisor as a lack of patience (in terms of when to exercise your rights) could prove costly for your future.

Gary Pettit

PBC set new ground-breaking law

On Monday 14 November 2016 at 10.12 a.m. Gavin Bates and Gary Pettit from PBC Business Recovery & Insolvency were appointed joint administrators of Bradford Bulls Northern Limited. They were asked to consent to the appointment just over an hour beforehand.

bradford

Bradford Bulls are former World club champions and Super League champions but over the past four years have crashed into a depth of financial difficulties. Faced with a winding up petition presented by HM Revenue & Customs it was administration or just 18 minutes after the administration appointment the club were due to be wound up.

The administration appointment was made by the holder of a floating charge that secured personal lending. Once appointed the administrators expressed some concern the loan agreement may be flawed in terms of the power to enforce its security and having raised this with their solicitors it was agreed to seek court directions to declare the appointment as valid.

For those not involved with insolvency, if the appointment of an administrator is deemed invalid the adminstrator can be held guilty of trespass. Also, the appointment of administrators is determined not only by the date but the TIME of appointment.

Based upon advice two applications were filed, namely:

  1. Seeking a declaration that the appointment by the floating charge holder is valid, or failing that;
  2. The court make an administration order with retrospective effect.

The applications came before Justice Mann in the High Court on Monday 21 November 2016. On considering the applications the judge noted HM Revenue & Customs supported the appointment of Gavin Bates and Gary Pettit and that administration would serve a better purpose for the stakeholders than the alternative of liquidation.  The judge also had to consider whether the court had the power to make the appointment retrospective.  In not doing so he automatically places the adminsitrators in a position where they were trespassers for the previous week.

After considering the insolvency provisions, the benefits of administration and the support from the largest un-connected (and petitioning) creditor Justice Mann decided the court did have the power to make retropsective orders. Rather than consider the legal arguments over the vailidity of the floating charge security he terminated the original appointment with effect from 14 November (ie the date of the original appointment) and made an administration order including the appointment of Gavin and Gary effectively from 10.13 a.m. on Monday 14 November.

Further Press Release regarding Bradford Bulls

PBC logo

The Rugby Football League and the Joint Administrators of Bradford Bulls agree mutual co-operation to resolve the Bulls’ affairs as swiftly as is possible.

Gary Pettit of PBC Business Recovery, Northampton was appointed one of the Joint Administrators to Bradford Bulls (Northern) Limited (“BBNL”) – in Administration, on 14th November 2016.    BBNL operates the Bradford Bulls rugby league club (“Club”), playing in the Kingstone Press Championship.

The Joint Administrators are represented by Prodicus Legal Solicitors of Leeds.

The Rugby Football League indicated yesterday that the Bulls’ membership of the RFL had been terminated.

After further discussions, both Mr Pettit and the RFL have today agreed that they will continue to work constructively together. This is in order to achieve the swiftest and most effective outcome for all stakeholders – including staff, fans, sponsors, creditors and others.

Mr Pettit said,

“I am pleased that we have secured an agreement to co-operate with the RFL. We fully acknowledge that the RFL have a duty to protect the wider interests of the game – including all of their member clubs.  

We look forward to working with the RFL to ensure that the Administration process is concluded as swiftly and as efficiently as is possible.

 To date, the Joint Administrators have received serious expressions of interest from at least six different parties, who are interested in acquiring the Club.   This was prior to any formal marketing of the Club by our agent, Mr Neil Bestwick of Sanderson Weatherall, Leeds.

We are excited by the interest shown. We consider that several of the parties appear to have sufficient resources and experience to take Bradford Bulls forward.  

A lot of hard work is going on behind the scenes to safeguard the Bulls’ heritage and legacy.

We expect to make a further announcement in due course.”

PBC appointed joint administrators of Bradford Bulls

PBC logo

Gary Pettit and Gavin Bates, Directors of PBC Business Recovery and Insolvency, have been appointed joint administrators of the Bulls.

“A club like Bradford Bulls serves the local community and we will be working towards finding a solution that preserves the future of the club while also meeting the requirements of the Rugby Football League with whom we have already opened a dialogue,” said joint administrator Gary Pettit.

“I appreciate the club has been in this position twice before in recent years and in my own view ensuring it does not occur again will be paramount.”

Early indications suggest there is interest in preserving the club, including protecting the position of creditors and employees, and this interest will be followed up by the administrators over the oncoming days.

Why it’s important to check your credit report

Why it’s important to check your credit fileRecent research revealed that more than 2000 county court judgements (CCJs) are made every day, often without the knowledge of the individuals and families receiving them.

A CCJ is made when someone takes court action against an individual, saying they owe them money, and the individual doesn’t respond. These orders play a key part in debt recovery for businesses. However, they can adversely affect the credit rating of individuals if they never receive it, perhaps due to a recent house move and the letter being sent to an old address, and are therefore unable to either dispute it or pay it.

As CCJs stay on an individual’s credit file for six years, the fact that it exists at all may only come to light later down the line when a mortgage or similar is applied for and refused.

A credit file is a financial record of every borrower in the UK, showing their repayment behaviour over a six-year period and, with CCJs hitting the headlines, it seems timely to take a look at some of the key reasons why you should review it regularly.

Get an overview of your outstanding credit

Seeing all your current financial commitments that require credit, such as mortgages, credit cards, loans and mobile phone contracts, in once place can help with the management of your personal finances.

Apply for the type of credit that is right for you

Lenders calculate their credit scores on different criteria, so while one may reject you, another may accept your application for credit.

Identify ways to improve your credit score

There are several steps you can take to improve your score including closing any credit cards you no longer use, ensuring you are on the electoral roll and making any necessary repayments on time. Also noted on your credit file will be details of any defaults on loans or CCJs.

Protect yourself against identity fraud

A look through your file will enable you to detect any names you don’t recognise or accounts that aren’t yours. If you find any, it could mean you are a victim of identity theft.

Spot any mistakes and ensure they are corrected

This includes making sure your address details are current and removing any financial connections to people who are no longer relevant, such as previous partners who you may have held a joint account with. Errors should be reported to the credit reference agencies as well as the company responsible.

You can check your credit file as often as you like without it impacting on your credit rating and it’s well worth the time to ensure it is accurate and as good as it can be so you are in the best position when seeking credit at a future date.

Companies such as https://www.clearscore.com/,  http://www.experian.co.uk/ and www.creditreport.co.uk offer free and monthly paid for packages that allow you to keep track of your credit report and score.

PBC invite you to a Charity Craft Fair

craft-fair 

PBC are hosting a Christmas craft fair in aid of the firm’s chosen charity, Ronald McDonald House.

 

The craft fair will be held on Tuesday 22nd November from 6:00 p.m. to 8:00 p.m. at PBC’s Northampton office (9-10 Scirocco Close, Moulton Park, Northampton NN3 6AP).

 

So why not join us for some Christmas shopping, coffee, home-made cake, mulled wine and networking?  RSVP to Lisa Parker on either lisaparker@pbcbusinessrecovery.co.uk or 01604 212150.

 

Launch Party a great success

OLYMPUS DIGITAL CAMERA

PBC would like to thank everybody who attended the launch party to celebrate the merger with Bottomley & Co at the MTC Training Centre in Coventry last week.  Gary Pettit said, “It was great to see familiar faces support the merger, as well as meeting new contacts”.

OLYMPUS DIGITAL CAMERA

Paul Rogers added, “The magician proved a huge hit, especially the trick which produced two live goldfish from a folded bank note and left onlookers stunned!”.  Sadly no photo of this moment was captured.

The event also marked the launch of PBC’s chosen charity, Ronald McDonald, with a speech from operations director Kym Carvell.  Donations of £182.92 were received, which PBC will double and round up to £400.

PBC announce Ronald McDonald as chosen charity

kym-carvell

PBC can announce they will be supporting Ronald McDonald as their chosen charity for the year.

“To be honest with you”, said Kym Carvell, “until recently I thought Ronald McDonald was a clown dressed in red and yellow associated with a well-known burger chain! I knew there was a charity side but had never really thought about it, which is a shame given the good work I now know it does.”

“There are 14 Ronald McDonald Houses as close as is possible to specialist children’s hospitals across the country, from Southampton to Liverpool. They provide accommodation for families whose child is receiving treatment at the hospital, free of charge so parents can stay close to their children.  There is a telephone in each room with a direct line to the ward the child is on so that immediate contact can be made either by the ward to the parent or vice versa.  There are communal kitchen facilities, laundry facilities, playrooms, lounge areas with TVs and each room is allocated secure fridge, freezer and cupboard space. There are staff and volunteers to run the house and provide much needed support for the families.”

“The house at Alder Hey hospital can accommodate 84 families a night & has welcomed over 16,000 families since it opened in 1993. It costs £600,000 per year to run the house and last year that target was short by £150,000.  The house is open 24 hours a day, 365 days a week, is full 94% of the time and looked after 1,723 families last year.  The longest stay has been 2.5 years.”

“On 5th August, my baby grand daughter was born 10 weeks premature with a number of health issues, some which we were aware of before her birth, some we weren’t and some caused by her early arrival. She was airlifted to Alder Hey children’s hospital in Liverpool on the day she was born and my son joined her the same day.  Her mother was quite poorly and not allowed to travel until she put her foot down the following day and joined them!”

“Little Billie-Marie has defied the odds stacked against her and has recovered from internal bleeding, a bleed on the brain and brain surgery to reduce fluid at just 5 weeks old. She’s been resuscitated twice and it has been a roller coaster ride for all of us.  She still has issues with her kidneys, a hole in her heart and a Coloboma in both eyes which may result in her being visually impaired but she’s a fighter and she will be just fine.  She had her first bottle feed last week and was transported to her local hospital the following day.”

“By comparison, my grandson required surgery at Addenbrookes in Cambridge when he was born in 2013 and no such accommodation was available for my younger son and his partner. There is no Ronald McDonald House at Addenbrookes.  The accommodation there had to be booked in advance and cost £50 per night with no facilities or direct telephone line.  Few young people just starting family life can afford that, certainly not for any length of time, hence why the Ronald McDonald charity does what it does.”

“I am in no way, comparing the hospitals, they are both amazing places but I do have direct experience of the difference the Ronald McDonald charity has made. It is because of this experience that PBC have chosen it as its charity of the year.  Alder Hey in particular, treats children from all over the UK, Isle of Man and Europe, over 270,000 young people were treated there last year, hence its association with the Ronald McDonald charity.  A lot of the patients and their families are miles away from home, 143 miles away in my case!”

“Now when I hear the name Ronald McDonald, I no longer associate it with a burger chain but with grateful families facing tough, emotional and uncertain times with their very poorly children. In an ideal world, there would be a Ronald McDonald House at every hospital and I hope we can help with that.”

The team at PBC will be working on a series of fundraising initiatives, so watch this space!

More information can be found at http://www.rmhc.org.uk/