PBC announce large dividend paid from company voluntary arrangement

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PBC are pleased to report on the recent payment of a dividend from a company voluntary arrangement (“CVA”).

 

After consulting with a financial consultant and seeking advice from PBC, the company proposed a CVA to its creditors which was approved with modifications in December 2013. The arrangement consisted of a splitting of the company into two distinct trading entities which included the saving of the majority of the employees’ jobs.  The arrangement included the sale of assets and contributions from future profits.

 

Recently, the directors of the company approached the joint supervisors regarding the possibility of varying the arrangement by settling the outstanding amounts due in respect of the monthly contributions and the sales consideration by way of a lump sum payment. The variation was approved by creditors who have now received a distribution earlier than originally expected.  The joint supervisors have distributed over £92,000 to creditors.

 

Joint supervisor Gary Pettit said, “It is always pleasing to be involved in the rescue of both a company and the saving of jobs, both of which have happened in this case. The directors sought advice at an early stage which resulted in the possibility of a rescue option being available to them.  This has allowed the company to turn around its financial situation.”

Local Entrepreneur Wins Young Business Person Award

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Fae Perkins, owner of Northamptonshire hair extensions business, Bond Hair, was crowned ‘Young Business Person of the Year’ at this year’s SME Northamptonshire Awards.

Fae, aged 29, set up her business specialising in professional hair extensions over 8 years ago and was also shortlisted in the Business Innovation and Entrepreneur of the Year categories at the awards ceremony which took place last Thursday evening.

The judges commented “Fae seems to have limitless energy linked to an impressive personal drive.”

Fae runs what she classes a ‘lifestyle business’ on top of holding down a full time position as Marketing Manager for prestigious self-build company, Potton. Fae has maintained and grown her loyal client base regardless of also being dedicated to her full time day job.

The Young Business Person award recognised business talent for those under 30 years of age and was sponsored by Northampton-based firm, PBC.

“I’m really happy that my hard work is recognised, I’m fortunate enough to love both my jobs so it isn’t a chore to work hard” continued Fae. “I never think 17 hour days are anything special, until someone points out that’s 2 days’ work for most people!”

The Young Business Person award was presented by Gary Pettit, Managing Director of Northampton-based business PBC, who said “PBC feel it is important to be part of the business community and were pleased to support this award. The economy needs young people in business and Fae is an excellent example”.

For further information on Bond Hair™ visit http://www.bondhair.com

How to avoid a Christmas cash flow crisis

How to avoid a Christmas cash flow crisisWhile some businesses, particularly in the retail sector, find that Christmas is their busiest time of year, for others it can be a difficult period. Factors such as lower levels of production due to increased holiday, decreased sales and, in some instances, total shut down for a week or two, can all have an impact. However, employees still need to be paid, and any loan repayments must be met and all these elements combined can have a negative influence on cash flow.
What steps can SMEs take to prepare for this? In this blog, we offer some advice.

Plan for extraordinary expenses

Christmas parties, staff gifts, bonuses and the like all add up. Employees will also often be paid much earlier in the month than usual. Make sure you plan and budget for this expenditure well in advance, so it doesn’t catch you out.

Delay unnecessary expenditure

Think carefully before making purchases and avoid buying big-ticket items if they can wait until the New Year.

Get paid

To maintain positive cash flow it is essential to invoice promptly and actively chase any late payments. In the run up to Christmas, this is more important than ever. If overdue accounts are not chased in late November or early December, then the chances are they won’t be paid until January at the earliest. Keep in mind that the person responsible for accounts may be taking extra annual leave and therefore may not be around to make payments. Likewise, if invoicing is delayed until after Christmas there will be a noticeable impact on cashflow at the end of February. Any delay in invoicing means a delay in getting paid.

Incentivise prompt payment

If there is room in the profit margins, consider offering a ‘Christmas discount’ for payment upfront or early settlement of the invoice and be clear on what the penalties are for late payment.
Maintain your cash reserves
Look at using the full payment terms you have agreed with your suppliers. At this time of year, there is little point in paying early, unless a discount is on offer.

Have a Plan B

If you can, build a cash buffer to help you through the period. If this is not feasible, then look at arranging alternative funding options such as a temporary business overdraft or loan.

 

To ensure your business does not start 2017 with financial difficulties it is important to plan ahead and have a proactive approach. Taking the time to assess your situation and predict any issues will pay dividends.

Charity Craft Fair raises £420.

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PBC would like to thank all those who attended the craft fair earlier this week for their generous donations which have raised £420 for Ronald McDonald Charity Houses.   For more information about PBC’s chosen charity, read here.

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In addition, PBC would like to thank the stallholders who attended, those who baked cakes and the team at the Northampton office for their hard work in making the event a success.

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More events to raise money for Ronald McDonald will be announced shortly, so watch this space.

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.

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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

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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

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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.