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 35^th 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 enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

How many of you read the title and finished the saying off?

When companies are under distress, more often than not, so too are its directors.  This can be an area of vulnerability as directors desperately look for solutions.

Unfortunately, this includes social media invitations to “Rid you of your worries,” or “We can extinguish your company debts,” together with similar assurances, all without proper attendance in front of an experienced person.  The directors are told either they pay a fee from their personal savings or, the other approach is an offer to acquire the company shares for a nominal £1 albeit, you have to pay a percentage of the asset value to the “Acquiring” company.  In both cases, the directors are assured the company debts will “Go away” and they can get on with their lives without any more worry.

Subsequent to the liquidator being appointed those who paid a fixed fee soon discover they are being held liable for various claims where it is alleged, they are personally liable and must pay to restore a position.  PBC have been asked to assist directors who have fell victim to this approach and two familiar traits are clear, namely:

1. The claim is often spurious and has little (if any) chance of being enforced through the courts. 
2. The approach can feel frightening to the receiving director and any negative response to their approach is met with an insistence a claim exists.

It should be mentioned, claims against directors happen in many insolvency matters.  However, more often than not a director will have been advised from the outset of potential headings for claims and an insolvency practitioner is generally more open to the commercial considerations surrounding a claim and any settlement.

Gary Pettit of PBC added,

“I was appointed liquidator by the Secretary of State over a company that was wound up by the court.  The PBC Team discovered the directors had been in the process of selling the company for £1 whilst also paying £10,000 to the acquiring party.  Who believes that is a good deal?  Unfortunately, this is what desperate people can do.

That planned deal was stopped, the £10,000 recovered and the assets were eventually sold for £180,000 – slightly more than the proposed £10,000!  Had that deal been completed the director could have been held personally liable for the resulting loss.”

The stress on directors of a company in financial difficulties can be high and often lead to making hasty decisions.  Those decisions can often be encouraged by businesses who entice the directors with an escape plan that can lead to the prospect of facing personal liability and potential directors’ disqualification for breaches of duty.  That deal very quickly takes on a different complexion.

If you require 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 enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.