Restoration of Company Leads to Major Pay Out to Creditors

PBC are pleased to report that having already paid preferential creditors in full a dividend of 44.58 pence in the pound was paid to unsecured creditors in a liquidation that, at first, appeared to have no distributable assets.

The company was placed into creditors’ voluntary liquidation in 2010 and following closure of the liquidation the company was dissolved. PBC were subsequently approached to restore the company to the register and act as liquidators to realise the outstanding director’s loan of approximately £100,000 which was unrealisable in the previous liquidation.

With the assistance of Katie Summers, a partner at Howes Percival LLP, a successful application was made to restore the company to enable recovery of the loan and subsequently a payment to be made to creditors.

Joint liquidator, Gary Pettit, said, “It is always pleasing to see returns made to creditors but the outcome and “out of the box” thinking surrounding this matter was particularly pleasing. I must also place on record my gratitude to Katie for the advice and assistance received”.

Insolvency back in the headlines

News broke early this morning of the liquidation of Carillion, the second largest construction company in the UK with 20,000 UK based employees and responsible for providing public services from sectors such as prisons, hospitals, transport and schools.

For clarity, the companies subject to winding up are:

  • Carillion Plc, company number 03782379
  • Carillion Construction Ltd, company number 00594581
  • Carillion Services Ltd, company number 02684154
  • Planned Maintenance Engineering Ltd, company number 00737307
  • Carillion Integrated Services Ltd, company number 03679838
  • Carillion Services 2006 Ltd, company number 03011791

This news will no doubt cause concern for the company’s employees, suppliers, sub-contractors and any other owed money by the company. The government have released advice about the situation for anyone affected which can be found here.

To assist the Insolvency Services administer the affairs of the above companies, insolvency practitioners from PwC were appointed as special managers. A special manager is appointed by the court on the application of a liquidator and the court lay down their powers such as an ability to trade or sell the business as a whole or in part.  The special managers have also set up a website that provides some guidance.

Should any creditor, including sub-contractors, after visiting the above sites wish to receive advice about their position, both on their rights as a result of the liquidation of Carillion or their financial position, please contact PBC on 01604 212150 or view our creditor services page.

A fool with a pen in hand!

The heading pretty much sums up my view of a director who grants a personal guarantee for company debts. I am possibly being a little harsh as giving a personal guarantee can sometimes be a non-negotiable term of contract or borrowing.

In the past I have seen directors who have guaranteed practically every supplier, making you question why they are trading under the vehicle of a limited liability company. Others sign personal guarantees unwittingly; only to discover what they have committed to after things have gone wrong.

One of the biggest misgivings relates to the small loan guarantee scheme. Guarantors are informed the Government will guarantee 75% of the outstanding debt if things go wrong.  The problem is the “Outstanding debt” is any residue debt AFTER the bank have exhausted all avenues of recovery, including enforcement of any personal guarantees.  The last time the Conservative Party were the shadow government I was asked to advise on these schemes and my recommendations actually went into their manifesto.  Unfortunately, the scheme has still not been amended so would-be guarantors of these loan schemes need to be aware of the consequences of your business failing.

Should you be faced with a personal guarantee being pursued the advice must be that you seek independent professional advice without delay. Maintaining a clear and regular dialogue with the guaranteed company can help but an independent advisor can also look into the validity of the guarantee generally and assist you in reaching a mutual settlement rather than staring down the barrel of bankruptcy.

If you require any advice or assistance on any insolvency-related matter then please contact Gary Pettit or Gavin Bates at PBC Business Recovery & Insolvency on (01604) 212150.

Christmas Opening Hours

The offices will be closed from 12 noon on Friday 22 December 2017 and will re-open at 9 a.m. on Tuesday 2 January 2018.

PBC would like to wish everyone a Merry Christmas and a Happy New Year

 

2017 – A Year of Change

Where has this year gone? It seems to be that every year flies by; why is that?  Age?  Maybe.  But then you think about it.  We never have a break between seasons these days.  With Christmas rapidly approaching advertisers are pushing us to book 2018 holidays and I will not be surprised if shops are selling Easter Eggs by the time this has been read!

Regardless, we are here and what has 2017 been like? In the world of insolvency we were confronted with the biggest change in the way we conduct assignments since 1987, which despite the years seemingly going quickly these days, 1987 DOES feel a long time ago!  The Insolvency (England & Wales) Rules 2016 were an attempt to consolidate, bring the rules into the 21st Century and improve creditor engagement.  Well, two out of three ain’t bad, as the song says.

The PBC Mediation Service started this year and its accredited mediator, Gary Pettit, can boast 2017 was 100% successful in terms of settling each dispute over which he presided, including a £1 million professional negligence claim by a bankrupt against his own Trustee.

So, what lessons have I learned from 2017? Well, there are probably too many (I am always learning) but two key lessons are:

  • Always be prepared to adapt to changes, both in business and in life. Business can be great but it can also be extremely cruel. Whatever you do, do not bury your head and think those problems will go away. Either face them head on or;
  • Take professional and independent advice. It is not something new but when you consider I am currently working with three individuals who all thought they could deal with the UK court system. All three are now bankrupt and face substantial statutory costs (in one of those cases, adding 50% again on top of their original debt). I am looking at ways to extricate them from bankruptcy, which could have been avoided had they faced their demon rather than bury their head.

Away from the day-to-day business Kym Carvell and Jamie Cochrane tested their stamina by walking from London to Northampton in aid of the Ronald MacDonald charity. There is a separate article on how they did so I will not spoil the enjoyment of the readers.

So, on behalf of PBC, may I wish everyone a Merry Christmas and a happy 2018.

If you require any advice or assistance on any insolvency-related matter then please contact Gary Pettit or Gavin Bates at PBC Business Recovery & Insolvency on (01604) 212150.

Charity Presentation

On 9th November Kym Carvell and Jamie Cochrane of PBC Business Recovery and Insolvency travelled up to Ronald McDonald House at Alder Hey in Liverpool to present Denise Byrne from the charity with a cheque for £3,303.48.  The money was raised on their sponsored walk earlier in the year from London to Northampton along with various other events which were run by PBC to support their chosen charity.

The Ronald McDonald House at Alder Hey Hospital accommodates families with sick children being treated at the hospital free of charge.  The home costs on average £600,000 a year to run but normally only receives donations of £450,000 a year and there is no other support towards the costs of the home.  Therefore, the amount raised by PBC equates to keeping the whole home open for 2 days.

Kym’s baby grand-daughter Billie-Marie was born 10 weeks premature with a number of health issues last year and the home provided somewhere for her parents to stay close by at this difficult time.  Billie-Marie has unfortunately had to return to hospitals on a couple of further occasions and once again the home were there to support her parents.

The visit coincided with Billie-Marie attending the hospital for some routine appointments the results of which were extremely positive!  Everyone was also surprised to learn that a leaf on the tree of life at the House is now sponsored by PBC and has a plaque with Billie-Marie’s name on.

PBC will be running further fundraising efforts in 2018, so watch this space for details.

It’s a Girl!

Everyone at PBC would like to offer congratulations to Jenny and her husband Matt on the arrival of their daughter Maddison earlier this week.

We are all looking forward to our first meeting with Maddison!

What is insolvency and does it apply to me or my business?

Insolvency is a very simple situation that can need a very difficult and sometimes complex resolution. If you find yourself in a situation where you are potentially insolvent you will need to take a long, clear look at things and decide what is the best option. In this video, Kym Carvell looks at what insolvency means for a business or individual. With over 30 years of experience of insolvency, Kym is a respected member of our team who is able to explain financial situations with clarity, honesty and a sympathetic ear. If you think the situations described in this video may apply to you, or your accountant is flagging a potential issue, your best option is to contact us as soon as possible so we can begin working towards a resolution.

 

Leopards do need to change their spots

It is a common phrase but if a leopard does not change its spots then it remains a leopard. Probably the most recent example of that has been British Home Stores who did not keep up with shopping trends.

Now another big name has fell into difficulty with Toys R Us in the United States falling into Chapter 11. For those who are unaware, Chapter 11 of the US Bankruptcy Code is similar to administration in this Country.  It must be emphasised this latest news involves the American division and neither the UK, European, Australian or Asian operations are caught under the current issues.

The (chapter 11) process is being used to enable the company to restructure approximately $5billion of debt, aided by a reported $3billion of new financing. The issue I would be asking about is more of a practical one.  Recent statistics suggest buying habits for toys are changing with estimates indicating 2016 saw 13.7% of toys being acquired on-line, as compared to 6.5% the previous year.  You have to question whether the large warehouse-style outlet is becoming a dinosaur when compared to the laptop in the home.

Whenever we at PBC look at a corporate restructure we first look at trying to identify what are the reasons for the company experiencing difficulties. After all, a leopard that does not change its spots will only endure a reoccurrence of those issues at a later date.  Toys R US say all 1,600 stores and 64,000 employees in America will be preserved, yet retail has seen the on-line competition bite into their business by another 7%in 2016.  I may be guilty of being too simplistic but often at PBC we find it is the simple things that are over-looked and, in the end come back and bite you.

If you require any advice or assistance on any insolvency-related matter then please contact Gary Pettit or Gavin Bates at PBC Business Recovery & Insolvency on (01604) 212150.