Pragmatic approach avoids bankruptcy.

When dealing with formal corporate insolvency appointments, sometimes directors owe funds to the company which, as office holders, we are duty bound to try and recover for the benefit of the company’s creditors.

One recent case being dealt with by our Milton Keynes Office had this very issue, but the director had also provided personal guarantees to company trade creditors totalling circa £300K. One of these trade creditors had also commenced bankruptcy proceedings against the director.  We were appointed liquidator of the company and, following some investigation, explored the prospect of whether an informal ‘full and final settlement’ could be reached in order to avoid bankruptcy and maximise the return to the liquidation and guaranteed creditors. We discussed this with the director and suggested they contact a solicitor who was then able to put the offer to all creditors.

We are pleased to report that all creditors accepted the offer, the settlement funds were received within 7 days and, in avoiding bankruptcy proceedings the director can now move forward.

Should you or a client 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

Claims by directors to the Redundancy Payments Service as employees..

In July we posted about employees’ rights to redundancy in an insolvency process and clarified the four main claims employees can make.

This post is aimed at directors who look to make a claim as an employee when an insolvency event occurs. This link Check if you can apply for redundancy payments as a company director – GOV.UK ( provides greater detail on the following:

  • Eligibility
  • How to apply
  • What to do if the claim is rejected

What is not covered off though is, if money is owed by directors to the company when it enters into an insolvency event, the Redundancy Payments Service will not make any payments to directors even if claims pass all the eligibility criteria. Therefore, it appears to be prudent to give some consideration in repaying these sums beforehand if possible, for the following reasons:

  • It may enhance the probability of a successful claim
  • Any appointed liquidator/administrator has a duty to recover the loan account in any event given it will be an asset.

If you have any queries regarding the above, please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to Alternatively, visit for further information.

Highest liquidations since 1960

That is the headline from the corporate insolvency statistics for the second quarter (1 April – 30 June 2023) that were published on 28 July by the Insolvency Service. 

In total there were 6,342 company insolvencies of which 93% were either creditors voluntary liquidations (5,240) or compulsory liquidations (637).  Collectively in the year (Q3 of 2022 to Q2 of 2023) the recorded number of creditor voluntary liquidations (“CVL”) is the highest since 1960, which is remarkable when you consider arguably our worst recession that peaked in 1993.  The latest figures mean the rate of liquidations is 52 in every 10,000 active companies registered as compared to 43.9/10,000 one year ago.

The remaining numbers reported were 409 administrations and only 56 company voluntary arrangements.  In addition to these numbers the two new rescue procedures introduced under the Corporate Insolvency & Governance Act have hardly been utilised.  From 26 June 2020 to 30 June 2023 there have only been 45 Moratoriums and 21 Restructuring Plans.

The big question must surely be why?  In short, the common features appear to be:

  1. The combination of Brexit, quickly followed by Covid-19 has had a severe impact on the world-wide economy.
  2. Cash flow has been adversely hit following the withdrawal of the Government’s fiscal and other measures put in place to support businesses during the pandemic, together with the legacy the financial support and the pandemic have left.
  3. Because of that support, companies that would ordinarily have ceased trading in 2020-21 were able to continue longer than envisaged.  This means the 2022-23 figures are swelled by the legacy of the higher than usual company survival rates during the pandemic.

Something that you will not see in Government dispatches is that many companies are using CVL as a vehicle for selling the business and assets, or even to “Phoenix” into a new company.  This is because of the much-contested decision to make HMRC a secondary preferential creditor, resulting in the restructuring procedures being no longer viable in many cases.  The low numbers of administrations, CVA, moratoriums and restructuring plans are indicative of this problem.

The saying, “Lies, damn lies and statistics” has some merit when considering the insolvency numbers because it is the devil in the detail beneath those core figures that matters and the signs are many businesses are finding themselves the subject of a merger or acquisition.

At PBC we are finding ourselves assisting companies and their professional advisors with going concern sales more often than in the past and we see no reason for that current trend to change in the short term.  However, more often than not, the key to an organised resolution is to seek advice at an early stage.  It is a long-standing piece adage but there can be no coincidence that most businesses are saved in one form or another where the directors sought advice early.

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) or 01908 488653 (Milton Keynes) or email to  Alternatively, visit for further information.

Insolvency Practitioner Declares Further Dividends

kalkulation am rechner

The success of an insolvency process is often measured on the ability to realise sufficient assets in order to pay something back to creditors and two cases we are administering are meeting that goal.

In the first case, PBC are delighted to announce the payment of a further significant interim dividend of £200,000 to HM Revenue & Customs from an insolvency estate.  Combined with a payment of £500,000 in January, HMRC have now received over 35% of their debt.  With further assets to realise, it is expected that well over £1million will be returned to creditors.

The second case involves an individual who was declared bankrupt in 2019.  Realisations of two buy to let properties and an endowment policy have enabled payments of approximately 20 pence in the pound to be made to unsecured creditors.

Jamie Cochrane said, “It is always pleasing to be able to make payments to creditors as described here.  The commercial approach taken by PBC on these cases has increased the dividends we are able to pay”.

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.

Don’t Let Late Payments Lead To Insolvency

How much does your business rely upon cashflow?

Does that seem like an odd question to ask?  Well, if so, why is it that a recently published report showed 60% of UK businesses expect late payment of invoices will increase?  Indeed, that same report claims we spend over 71 days per annum (equating to over £27 billion in lost revenue) chasing late payments.

We have all heard the phrase, “Cash is king,” but the vicious circle of late payment across businesses damages the economy and puts businesses at risk of needing to enter into an insolvency event.

Cashflow difficulties are invariably cited as one of the most frequent causes for business failure and at PBC we have seen examples where better credit control may have resulted in them avoiding insolvency altogether.  Indeed, in a recent liquidation a creditor was bemoaning had they been more strenuous with their efforts to get paid they may not have been staring at a write off now!

At PBC we suggest all companies need to take steps to accelerate payment of sales invoices as a sales ledger does not pay the bills, payment does.  That is not always easy to accomplish and a commercial view must be adopted at times.  However, if it has proven too late and you get that dreaded notice your customer is entering into an insolvency event then contact PBC and we can advise you of your rights and even represent you to ensure your interests are protected as best as possible.

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.

Informal full and final settlement – it can be done!

Settlement Agreement

Informal full and final settlement – it can be done!

We were recently referred a matter, which, was slightly unusual in the current climate and below is a summary of the facts:


  • Company had ceased trading.
  • Only asset was cash at bank of £67,000.
  • 6 Company creditors totalled £201,000 of which £75,000 was owed to the company directors.
  • No HMRC debt and no Covid support loans.


The directors asked could we deal with the voluntary liquidation of the matter and of course, given the net liabilities we said we could. However, given the nature of the matter and looking to think out of the box and, provide best advice, we suggested best try an informal full and final settlement which would provide the following:


  • A return of 33 pence in the £ (within 28 days) in the informal offer.


  • 21 pence in the £ (payment not likely to be received within 1 year) if 100% of creditors did not agree with liquidation as a result.


We are pleased to report that agreement was reached but this was mainly due to their being no HMRC debt and no Covid support loans (HMRC and liabilities in respect of Covid support loans are unable to informally agree this sort of offer) with the creditors involved being able to make a commercial decision.


Whilst it would have been easy for us to deal with the liquidation, we always to look to provide the best advice which, we believe, is certainly in evidence here.


If you require any advice on an insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 or email to  Alternatively, visit for further information.


Thomas Cook directors avoid disqualification

Sky News are reporting no further action shall be taken against the directors of Thomas Cook under the Company Directors Disqualification Act.

Andrea Leadsam, the then business secretary at the time of the liquidation, sought an enquiry as a priority given the significance of this case and its implications for thousands of customers and employees.  She added,

“I ask that the investigation by the Official Receiver looks, not only at the conduct of directors immediately prior to and at insolvency, but also at whether any action by directors has caused detriment to creditors or to the pension schemes.”  Labour MP, Rachel Reeves added, “Its directors had exhibited a lack of challenge in the boardroom as the company piled up debt and Thomas Cook management missed opportunities to reduce debt levels and give the business a viable future”.

“Will I be banned?”

A question we, at PBC, get asked constantly by directors.


Like most high-profile companies, the Thomas Cook demise was subject to significant media attention.  However, regardless of the media reporting or the size of the company that enters into an insolvency event, it all comes down to what was the conduct of the directors?  In the case of Thomas Cook they engaged with the creditors, they took independent advice throughout and, when they were advised their efforts were going to be to no avail, they followed that advice and took what is an incredibly difficult decision.

At PBC we have an immense level of respect for every person that contacts us for advice.  It is often a period of heightened emotion and, at times, can feel intimidating.  However, taking that advice generally dismisses the “Pub talk” stories and can open up options to address those issues that are keeping you awake at night.

Taking early advice helps to control the situation, provides more options being available and helps avoid directors doing things that could see them getting embroiled in issues where disqualification and possible personal liability are a real threat.

Should you have an insolvency-related issue then please contact a member of the team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to

Lies, Damn Lies and….

PBC Logo

Most readers are probably smirking as they finish the quote in the heading.  However, talking statistics, The Insolvency Service has released the latest statistics relating to registered company insolvencies in December 2021. Commentary – Monthly Insolvency Statistics December 2021 – GOV.UK (


In total there were 1,486 companies that registered as insolvent during December.  Of these 1,365 were voluntary liquidations, which is 73% higher than December 2019.  What is probably more concerning is that the principal rescue procedures of administration and company voluntary arrangement only numbered 79 companies, being 49% and 67% down respectively on December 2019 figures.


The remaining 42 companies all fell into compulsory liquidation, which is a 75% fall in numbers as compared to December 2019.  However, this is understandable as a moratorium over most winding up petitions was introduced by the Corporate Insolvency & Governance Act (“CIGA”) and, new tapering measures were introduced from 30 September 2021 when the moratorium was to be lifted.  This will continue to have a direct impact on post CIGA moratorium winding up petitions for the interim.


To add to the above numbers, two new procedures were introduced that were designed to assist safeguarding businesses.  However, in the 6-months ended 31 December 2021 the company moratorium numbered just 15 while the restructuring plan only 10 of which two concerned parts of the Virgin Group of Companies.


No doubt there will be plenty of analysts who will draw their own conclusions as to why there seems a disproportionate number of liquidations as opposed to rescue procedures.  At PBC we have considered this and summarise our opinion of the key reasons as:


  1. There is not a viable core business to save.
  2. The secondary preferential status, now enjoyed by HMRC, acts as a block to any opportunity of a return to the general body of creditors.
  3. Creditor frustrations are at such a level they will not entertain proposals for restructuring/saving the business.
  4. The procedural costs are sometimes prohibitive when compared to the company liabilities.
  5. Due to various legal and technical reasons, it is more constructive to look at a “Phoenix” and start afresh,


Much of the cause for the above issues also stems from that long-running problem of directors not taking early advice.  At PBC we fully understand it is a very difficult step to take in calling our offices and seeking help, but it cannot be a coincidence that those early callers generally find they have more options available to them and invariably matters can be addressed in a more orderly  & positive manner.


Should you have an insolvency-related issue then please contact a member of the team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to or access our website at

Formal crackdown on directors who dissolve companies to evade debts

The Insolvency Service has been granted new powers to take to task directors who dissolve companies to avoid paying company debts. This is as a direct result of directors dissolving companies to avoid repaying Government backed loans put in place to support businesses during the Coronavirus pandemic.

The new legislation now extends the Insolvency Service’s powers to investigate and disqualify company directors who have been deemed to have abused company dissolution processes.

Previously the Insolvency Service had these powers to investigate directors of companies that entered formal insolvency such as liquidation and administration. It is also understood that the Insolvency Service may also be instructed to investigate live companies where evidence has been brought to their attention of wrongdoing.

In addition, the new legislation also allows for the Insolvency Service to apply to court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

Should you be a director and are concerned re the new legislation then please do make contact with Gary Pettit, Ian Cooke or Jamie Cochrane (01604 212150) to understand your obligations and responsibilities

It is winding up, but not as we know it.

On 10 September 2021 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 was laid before Parliament and comes into force with effect from 29 September 2021.

For most people, that maybe a case of, “So what?”  However, for those who are thinking of enforcing the repayment of debts it will have a logistical impact. 

As many will know, prior to the introduction of the Corporate Insolvency & Governance Act 2020 (“CIGA”) a creditor, owed £750 (or more) could present a winding up petition against a debtor, following either an unsatisfied judgment or the expiration of a statutory demand.  However, provisions within CIGA prohibited the use of statutory demands or winding up petitions, unless it could be proven the petition debt did not arise (or become unpayable) as a direct result of Covid-19.  These interim provisions were due to expire on 30 September 2021, having previously been extended on previous occasions.

We can all speculate on why the CIGA temporary provisions were extended.  However, suffice to say the continuation of Covid-19 and the feared impact of “Letting loose” frustrated debtors to pursue unpaid debt (and its impact on the economy) were clearly on the agenda.

In short, the temporary provisions being introduced:

  1. Increase the debt that must be owed to present a company winding up petition to £10,000.
  1. Creditors must seek proposals from the debtor business for repayment of the debt, giving 21 days to respond before they can proceed with a winding up petition: and
  1. Commercial Landlords must still demonstrate to a court that debts are not Coronavirus related until the end of March 2022.

Many believe the £10,000 limit should remain beyond these temporary measures but that is a discussion for another day.

The more interesting measure is the introduction of the 21-day notice.  At first, those who deal with debt recovery may ask what is the difference between a statutory demand (that provides 21 days to pay or secure the debt in any event).  You may even ask whether a statutory demand still needs to be served after this new 21-day notice has expired.

Thankfully, the amendments to the schedule provide the answers.

Paragraph 4 includes two distinct requirements (in addition to those already prescribed):to the schedule provides the 21-day notice must contain:

(e)          a statement that the creditor is seeking the company’s proposals for the payment of the debt, and

(f)           a statement that if no proposal to the creditor’s satisfaction is made within the period of 21 days beginning with the date on which the notice is delivered, the creditor intends to present a petition to the court for the winding-up of the company.

This is a significant shift from the requirements within a statutory demand as it appears to be steering an unpaid debt scenario down the road of Alternative Dispute Resolution.  This assumption appears to be supported by the fact a statutory demand is not required on the expiry of the 21-day letter.  However, Rule 7.5(1) of the Insolvency (England & Wales) Rules 2016 have been amended to include two statements on the winding up petition, namely:

(1)          that the requirements in paragraph 1 of this Schedule are met, and

(2)          that no proposals for the payment of the debt have been made, or a  summary of the reasons why the             proposals are not to the creditor’s satisfaction (as the case may be).

In theory, this appears like a sound compromise to ensure there is not a flood of winding up petitions from 1 October onwards.  However, the issue regarding whether any proposals are satisfactory, or not, appears subjective.  If a petitioner believes they are not satisfactory, what happens at the first hearing of the petition?  What if the court adopt the view the petitioner was unreasonable in either refusing the proposals or, in the alternative, had not engaged in settlement negotiations?  Worse still, if the petition is dismissed in favour of payment terms, who pays the costs, not to mention consideration of any damage caused by the petition having already been advertised?

At PBC we are taking the view these interim measures were attempting to allow debtors to pursue unpaid debts but in a commercial and understanding manner.  In short, avoiding the potential flood of recovery action that has been the fear behind previous extensions.  It also sends out a warning to those on the receiving end of debt enforcement and that is to act in a timely and appropriate manner when considering the viability of your business.

Should you have an insolvency-related issue then please contact me at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to or access our website at