PBC Festive Season Closing

The staff of PBC Business Insolvency & Recovery Ltd would like to thank you and your continued support in 2019 and would like to take this opportunity to wish you a very Merry Christmas and Happy New Year.

Our offices will be closed at 12.00pm on Tuesday 24th December 2019 and re-open at 9.00am on Thursday 2nd January 2020

Hack it and Whack It

Despite the rain the Hack it and Whack it event went ahead. A mixture of 40 golfers and non-golfers lined up at Brampton Heath Golf Club to test their skills on the driving range and the putting green. Not sure whether we unearthed the next Tiger Woods or Charley Hull but a good time was had by all.

Thank you to all those who braved the day and next time we hope to secure a brighter day.

We are holding our Golf day on 19th September so it would be great to see you there.

The financial cost of debt

The title for this editorial is quite deliberate. When companies and individuals are experiencing debt problems there is a non-financial cost consequence.  I am talking about the pressure, stress, anguish and, in some cases relationship breakdowns.  That is the physical cost burden and is often over-looked in the creditor scramble to get paid before any implications of a formal insolvency prevail.  The more fundamental cost is that of the professionals as every penny they draw down is depriving you, as a creditor, of a better (or any) return.

Notes

Since the Insolvency Act 1986 came into force there has been endless commentary surrounding the fees charged by an insolvency practitioner (“IP”) for handling insolvent estates. Unfortunately, there have been reports that fully justify criticism where even IPs have been known to be shaking their head with disbelief at what another IP is claiming.

So, what can you do to control the costs? October 2015 saw the implementation of remuneration reforms for IPs.  Now, once appointed, the IP must provide an estimate of the costs for completing the appointment if he proposes to be paid on a time cost basis.  Okay, that is a bit like wetting your finger and holding it in the air to see which way the wind is blowing as many things can (and do) arise that were unknown at the time of appointment, but it is the law nonetheless.

Under the reforms an IP can fix their remuneration on a time cost basis, fixed (or capped) sum, a scale rate percentage or a combination of all three. The key point to remember is you, the creditor, fix the basis of remuneration so it is really important you do get involved.  In a recent example I advised a creditor where the liquidator was seeking a level of fees and disbursements that, when you read “Between the lines” was designed to ensure the liquidator took all of the realisations in costs.  Based upon our advice the resolutions sought were rejected and alternative resolutions put forward that promote creditors at least getting a dividend.

In addition to the October reforms the Insolvency Service announced on 1 July 2016 the Official Receiver’s fees were changing. This announcement came out of the blue but, in essence, the Official Receiver will take a lump sum from the first realisations followed by a straight 15% of the remaining assets TOGETHER WITH 15% of the funds available to distribute to creditors.

Fixing remuneration on a scale rate basis can be seen to be the way forward as creditors get a good idea of the likely outcome. However, it can also appear very expensive.  For example, how much does it cost an IP to instruct the bank of an insolvent estate to close the account and send the closing balance to the IP?  I did see one example where creditors approved a global 25% scale rate of realisations, which included over £100,000 in the bank.  A creditor contacted me for advice as they were intending to complain as (quite rightly) they thought £25,000 for closing a bank account seemed a little excessive.  Unfortunately, because creditors did not properly engage with the insolvency and simply allowed a 25% rate on ALL realisations the IP in question ended up as the only happy bunny!

So, if you are unfortunate to be on the receiving end of a notification one of your customers is heading towards a formal insolvency, be involved or, better still, consult an IP to act on your behalf. Ensure the foundations of the insolvency are laid down at the outset.  Complaining later when you are being forced to write off your debt while simultaneously the IP has been authorised to take handsome fees serves no purpose other than to increase frustration.

A time of celebration

 

jamie-cochraneAt Pjenny-amosBC there is a belief that individual team member progression is key to future success. With this in mind, the directors would like to announce how delighted they are for Jenny Amos who has passed the Certificate of Proficiency for insolvency with merit.  It is a great result and is indicative of that support for enhancing the knowledge of each member of the Team.

Mind you, PBC cannot take the credit for some events where congratulations are appropriate, as Jamie Cochrane got married to Naomi on 5th August.  Both Gary and Gavin did try to warn him about the long-term effects marriage has on us chaps but, thankfully he would not listen.

How to choose the right accountant

Choosing an Accountant

Selecting the right accountant is a vital business decision.  A good one can help a business save money and grow, while a bad one may do the opposite. However, deciding which accountant to work with can be a bit of a minefield.  Here are our top tips to help you make the right decision.Continue reading

Life and death

gary-pettitPlanning for succession should be in the thoughts of everyone in business from early on.  After all, what is to happen to your business when you decide it is time to retire?   In other words, what is your own exit strategy when either you have attained your goal or age has finally caught up with you and retirement prevails?

Continue reading

Top cash flow tips for SMEs

Cash flow 1

 

One of the most crucial aspects of running a business is maintaining a healthy cash flow.  After all, if a business can’t pay its staff and suppliers it can’t operate, regardless of how much it is selling or the size of its profit.

Continue reading