The cost of disputes?

Picture this.  There are two directors – one responsible for the day-to-day operations of the business while the other managed all contractual matters and the bookkeeping.  A dispute arises between the directors, trust rapidly dissipates and accusations start flying.

The above is not an all too untypical scenario PBC have witnessed, whether that is while using our mediation services or a precursor to the company entering into an insolvency event, usually as a result of the management dispute being irreconcilable.

The courts will show little (if any) remorse towards a director who demonstrates a failure to meet their statutory duties as they adopt the stance that duties prevail over any personal feelings or negative impact meeting those duties may cause.  The latest demonstration of the court’s views was on 8 March 2024 when, in the case of Manfuku London Ltd and Cocoro Restaurants Limited [2024] EWHC 457 (Ch) the court held a director personally liable for costs.

The main issue in the above case was surrounding access to company records, held by one of the directors but also had wider disputes including allegations of theft.  The court refused to consider the wider disputes and ordered for the records to be delivered up, as these could be easily produced. 

The key message, here, is should a management dispute arise, take advice at the earliest opportunity.   Not seeking that early resolution can be very costly on several levels.

If you need any advice or assistance on a management dispute or any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to Alternatively, visit for further information.

The liquidator says I owe the company

Lady working at desk

Have you been told you owe money to your company under a director loan account (“DLA”)?

Sometimes directors follow a practice of borrowing from their company, only to extinguish that borrowing with a dividend around their financial year end.  Others simply take a loan with a view to repay over an agreed period of time.  However, an adverse loan account can also arise where purchases cannot be allocated to anywhere specific so, in default, are posted to a director loan account.

An adverse DLA is a debt repayable on demand so, if you resigned or the company entered into an insolvency event, you could find a demand for the full balance to be repaid forthwith.  In saying this, where a company is profitable then “Repaying” by way of a dividend is a common practice.  However, what happens if the company is (or is likely to become) insolvent?

Where insolvency is looming, the duty of the directors is owed primarily to the company creditors as a whole.  Even if the company appears to be balance sheet solvent, the fact you are not paying your debts as they fall due means the company is insolvent.  In this scenario paying dividends are likely to be declared as unlawful, resulting in a director having to address payment of the DLA if personal funds permit.

At PBC we have experienced directors being oblivious of any loan existing and, indeed, an analysis may show nothing is due or payable as the DLA was actually built up by genuine business expenses.  However, the burden of proving the amount claimed is wrong falls upon the director.  If they cannot prove the transactions were not for their personal benefit then the director is liable for the DLA.

The importance of maintaining a record of how a DLA is constructed was demonstrated in a case known as Re: Mumtaz Properties.  In that case three directors were taken to court by a liquidator who was claiming repayment of three DLAs.  The defence put forward was, if the liquidator had the books and records they would see the DLAs were not correct nor any debt owed.  The court noted the directors were in breach of their duty whereby they had not delivered up to the liquidator the books and records.  In pointing out that breach the court not only upheld the liquidator’s claims, but he made the directors jointly and severally liable for the aggregate total of the three DLAs, together with costs of the proceedings.

PBC have previously raised this subject, which is becoming a regular occurrence and repeat our advice where:

  1. First, ensure the balance is correct.  All too often a DLA becomes a “Dumping” ground for unallocated accounting entries.  Make sure you have an agreed balance.
  • Does the company owe you money?  If you have paid for goods or services using your own funds or credit card, have these been posted to the DLA?  This may also include your employee entitlements, in terms of wages and accrued holiday pay.
  • If you can, repay the agreed balance, which in turns prevents the Redundancy Payments Service from using an adverse loan to reject a director’s potential  employee entitlements.
  • Offer to repay the agreed balance to an appointed liquidator by way of instalments.
  • Alternatively, offer a one-off payment in full and final settlement.

Settlements (either by way of instalments or otherwise) are always open to negotiation but can make repaying a DLA more manageable or, in the case of a lump sum settlement, remove that burden from a directors’ mind.

The key message is where a DLA exists, take advice, and be prepared before taking that next step.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on (01604) 212150 (Northampton) (01908) 488653 (Milton Keynes) or email to

Alternatively, visit for further information.

The right advice, part 2

a man and a woman shaking hands

We recently wrote an article in respect of receiving the right advice.

Subsequent to that article we received an enquiry via our website whereby the director had worries about his company’s finances.  As a result, he had sought advice, we were told, from two other insolvency practitioners.

Below is a summary of the position:

  1. Company liabilities were circa £28K to HMRC.
  2. No Bounce Back loans or other Government Covid support loans.
  3. No overdraft facility.
  4. The principal company asset was an overdrawn loan account of circa £47K.

The director claimed those who previously advised him did not mention that the overdrawn loan account would need to be recovered, if possible, in a creditors’ voluntary liquidation and just focused on the cost of the process.

Having asked searching questions of the director it transpired that, whilst he did not have the cash funds to make good some or all of the overdrawn loan account, he did jointly own a property and his share of the equity was circa £100K. At this point it was explained that should the company enter liquidation and given his equity in property; any liquidator would be duty bound to recover the loan account.

As it transpired, he believed his business was viable and could trade on, particularly if he could just get some breathing space. At this point he was urged he speak with HMRC and seek a time to pay agreement together with exploring the opportunity of realising some funds from his equity in property to try and pay in full or in part the loan account and for these funds to help in paying HMRC’s debt.

At the end, the director expressed his gratitude for the full and frank advice provided and would indeed look to trade on as opposed to the apparent pressure received from others to place his company into liquidation.   Unfortunately, this is one of an increasing number of cases where the advice has been inaccurate or incomplete.  At PBC, we understand the pressures individuals and company directors face and it is imperative they receive the right advice, that includes the wider issues that are all too often overlooked.

If you need honest and frank advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to Alternatively, visit for further information.

35 years -how times have changed

clock on wall with certificate

When you are looking for advice, you may take note of the level of experience the advisor possesses.  Well, if it is experience you seek then there is no need to look further than PBC’s Gary Pettit who, on 6 March 2024 marked his 35th year of working in the insolvency and restructuring industry.

To celebrate this notable achievement PBC asked Gary to reflect on the changes he has seen since 1989.

Three major changes I have seen are the law, regulation and the working environment.  The law has evolved (not always for the better) to reflect society and economic changes over time.  One of the largest changes was the Enterprise Bill and I was on our industry’s national council at the time. I remember going on vacation where the Bill was my holiday reading, much to the delight of the Wife (not)!  Mind you, a feather in my cap was that I put forward changes in the way a bankrupt’s home is dealt with and, to my surprise, those changes were adopted into statute.

While needed, regulation has probably gone too far.  My first ever liquidation was Garde A Manger Limited who were based in Leighton Buzzard and I still have a copy of the statutory papers.  The first thing you notice is the type face and remember, it was typed by a secretary in a typing pool, where tippex was the modern overwrite we take for granted these days.  The report to creditors was a mere four pages long.  A similar liquidation, now, will be around 26 pages, which is indicative of just how far regulation has gone.  All too often creditors will bemoan the length of documents but, as I was advised when undertaking my insolvency studies, until you lobby to change the law, abide by it.

Back in those early days, everything was done manually.  Recording of creditor claims were on A1-size analysis spreadsheets and the secretaries would always hope there were not too many creditors because they would have to type each individual name and address onto envelopes for the mailings that were required.

The environment, for me, started to change in 1991 with the introduction of the first computers in the office.  I recall the day a certain partner asked me how to put a space between two words on “This thing” – how times have changed.  Another issue arose when a member of the (then) Smith Dove team thought it would look good to have a black background on her screen.  Let me think, a system display in black and grey with a black background, hmmm.

We had an office mobile phone that you booked out if needed and the evening outgoing mail was generally by the box load.  If something was urgent then the fax machine was the essential tool.  Now, emails dominate the correspondence world and, recently, one of the PBC apprentices asked, “What is a fax machine?”  Boy, that made me feel old!

Despite all of the changes I have experienced, I can genuinely say I have enjoyed (and continue to enjoy) my job.  Yes, there have been lows, but they are far outweighed by the highs in an industry that covers the full spectrum of human emotions, from sadness to anger, depression to delight; it deals with it all.  It is a vocation that never stands still and so you are forever learning.  Keeping on top of current legislative changes and being able to manage every challenge that confronts you is why this job is so rewarding.  It is why I still look forward to the next challenge.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton) or 01908 488653 (Milton Keynes) or email to  Alternatively, visit for further information.

Significant Distribution to Creditors

Woman sitting at desk with PBC logo on the screen

PBC are pleased to announce the payment of a significant interim dividend amounting to £300,000 to creditors in a creditors’ voluntary liquidation. This matter has been complex from an asset realisation perspective but we are pleased to have made this distribution within 18 months of our appointment as liquidator and there will be a further £200,000 to follow.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency at either our offices  – Northampton Office (01604 212150)/ Milton Keynes Office (01908) 488653  or by email to  Alternatively, visit for further information.

Are you getting the right advice?

2 men in an office

A recent news article claimed that business insolvencies were the highest since 1993.

As usual with the media, this report cited the overall numbers and proceeded to break them down into their individual insolvency types. However, at PBC we question how meaningful the breakdown is to the readers.

The fact is, for most companies there are no less than 8 differing formal options available under the Insolvency Act and (following COVID) The Corporate Insolvency & Governance Act. Add the other procedures available for special circumstances and the range of insolvency options increases still further.

Sometimes the option is clear. For example, if a company is solvent and the directors are looking at a solvent wind down (usually for a tax efficient way forward) then you are looking at a member’s voluntary liquidation. However, regularly PBC find the circumstances surrounding a company lend themselves to a wider choice of the options. This is where understanding the business, itself and the issues confronting the company, together with directors’ preference determine the right way forward.

At PBC, we pride ourselves in advising the Directors of the right option for the company. We explain each insolvency type and the reasons why (or why not) that option ought to be considered. Naturally, there are occasions where it is news the directors do not wish to hear (or were not looking forward to their views being confirmed) but often, the advice provided comes as a huge relief and aids removing that “Sword of Damocles” that has been causing stress and sleepless nights.

As Gary Pettit says,

“I have been in this industry for almost 35 years and throughout that extensive career, have often heard directors ask how to place their company into receivership or they need to, “Do a pre-pack”. When I ask them for their understanding, I am met with a blank look as they admit to hearing about that procedure or, a friend told them that is what they must do. It is understandable because insolvency is a highly specialised area with plenty of “Minefields” just waiting for a director to get something wrong. That is where PBC take pride in guiding those directors into adopting the correct way forward, based upon the surrounding issues and circumstance.”

If you need any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to Alternatively, visit for further information.

PBC are celebrating National Apprenticeship Week

picture of the three PBC apprentices

This week is the 17th annual celebration of apprenticeships, a time to appreciate apprentices everywhere.

We wanted to give a big shout out to our own invaluable apprentices, Grace, Marli and Liv.

PBC have been using apprentices for over 20 years and have benefitted from some great people over that time, many of whom still remain and work for the business. Whilst giving someone a great start in their working career, PBC also see the advantages of developing new talent in the Insolvency business.

As a Company we remain committed to supporting the apprenticeship service.

Celebrating 20 years at PBC

Natasha Pink our insolvency manager in her Arsenal top.

This month our Insolvency Manager Natasha Pink celebrates 20 years at PBC! 

Many of you will be aware that Natasha joined the original Marshman Price business before it became PBC Business Recovery & Insolvency Ltd in 2014.

When she started working as a junior in 2004 a litre of petrol cost 80p, a loaf of bread was 62p and Arsenal won the premier league unbeaten (she is an avid Arsenal supporter).

Congratulations Natasha, we look forward to the next 20 years!

HMRC –Security Deposits on the increase

Woman sitting at desk using a mouse.

Whist it has recently been reported that insolvency figures are rising, and the number of winding-up petitions presented by HMRC are of a significant number (2,385 for the 2023 calendar year), we are seeing an increase in HMRC serving security deposits in respect of PAYE/NIC/VAT liabilities where HMRC believe there is a risk that taxes will not be paid.

These security deposits are requested from the company and can also be requested from the directors of the company personally, with threat of committing a criminal offence if the security payment is not made.

The security deposit requests, along with the presentation of a winding-up petition, are the last resort for HMRC who would much prefer to work with companies to try and recover sums outstanding. It is important therefore if companies are struggling to make good tax liabilities that they contact HMRC  to agree an affordable payment plan.

Should you be struggling to pay not just HMRC but also other creditors in a timely fashion, then please contact PBC Business Recovery & Insolvency  on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to to discuss your available options.  Alternatively, visit for further information.

A Decade of Dedication: Celebrating 10 Years of PBC Business Recovery & Insolvency Ltd

PBC sign

Today (14th January 2024) marks a significant milestone for PBC Business Recovery & Insolvency Ltd as we proudly celebrate our 10th anniversary! A journey that began a decade ago has been filled with challenges, triumphs, and, most importantly, the unwavering support of our valued team and referral sources.

Reflecting on the past ten years, we can’t help but feel a sense of gratitude for the incredible journey we’ve had. From humble beginnings to where we stand today, it’s been a remarkable adventure shaped by the dedication of our team, the loyalty of our referral sources, and the continuous pursuit of excellence.

Throughout the years, PBC Business Recovery & Insolvency Ltd has evolved and grown, adapting to changing landscapes and embracing innovation. Our commitment to delivering quality service remains steadfast.

We owe our success to the hard work and passion of our team members, whose tireless efforts have propelled us forward. Their commitment to our shared vision has transformed challenges into opportunities and setbacks into lessons that have fuelled our growth.

As we celebrate this milestone, we are filled with excitement for the future. The next decade holds the promise of new accomplishments, deeper connections, and the opportunity to continue serving the business community with the same level of dedication that has defined PBC Business Recovery & Insolvency Ltd.

Thank you for being an integral part of our journey. Here’s to a decade of achievements, and to the exciting adventures that lie ahead. Cheers to ten years of PBC Business Recovery & Insolvency Ltd and to many more to come!