Insolvency and mental wellbeing.

Insolvency can significantly impact upon the mental health of individuals as a result of the stress, anxiety and uncertainty that is associated with financial difficulties.  Where someone is already suffering from mental welfare, financial difficulties may also exacerbate those existing mental health issues.

At PBC, we are acutely aware, that potential insolvency, at times,  can bring feelings of shame, guilt, and failure.  It is human nature to feel that way irrespective of the underlying reasons behind their difficulties.  It is, therefore, vitally important for those having insolvency issues that they seek support from financial advisors and insolvency practitioners at the earliest practicable date as this may ease those negative and damaging thoughts.

From PBC’s perspective, when providing advice, there is no judgement.  We are very likely to have seen worse financial positions and have no greater respect than those that make contact to seek advice, either by phone or attending our Northampton or Milton Keynes Offices for a meeting. All initial meetings are completely free of charge, without obligation and we promise those we advise they will be more informed as to their options (don’t rely on google!).

Reaching out early for advice is crucial in managing both the practical and emotional aspects of insolvency and it is even more important to prioritise self-care, remembering that there are resources and people available to support you through difficult times.

Should you or anyone you know/advise require any 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.

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.

Liquidation, Personal Guarantees, and Individual Voluntary Arrangement….

2 men sitting in office in conversation

During  the summer of 2023 PBC Business Recovery & Insolvency were in discussion with a director whose company was to go into liquidation.  It became apparent that he had provided a significant number of personal guarantees to company creditors that would crystallise and, with no dividend being paid from the liquidation, the guaranteed debt would fall on the director in its entirety.  The director was clearly concerned as to the consequences and we provided advice on how best he deal with these liabilities going forward – it was clear that it would be a choice of either Bankruptcy or propose an Individual Voluntary Arrangement (“IVA”)

Given our experience in dealing with personal insolvency and the fact that one creditor would have a significant vote if an IVA was to be approved, we approached that creditor, informally,  with a summary of the IVA to gauge their appetite to agree. We are pleased to report that the IVA was approved in October 2023 and the IVA has now been concluded 6 months on with the funds distributed to all creditors, resulting in the director being able to move forward.

If you require 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.

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.

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.

It’s Not My Fault!

What is your understanding about being a director of a company?

It is proven time and again that people are unaware of their duties and seem to adopt the idea being a director is merely a title, not much different from that of manager or supervisor.  Nothing could be further from the truth as, unlike those titles, a director has statutory duties to:

  • Act within their powers.
  • Promote the success of the company.
  • Exercise independent judgment.
  • Exercise reasonable care, skill and diligence.
  • Avoid conflicts of interest.
  • Not accept benefits from third parties.
  • Declare any personal interests in proposed or existing transactions or arrangement with the company.

Where a company is insolvent (or likely to become insolvent) the court takes the view that if you fail to meet your duties to protect the interests of the company creditors as a whole then, by default, you accept the consequences of your actions.  Ignorance is no defence. 

These duties can challenge the integrity of a director, particularly when times are tough and you wish to “Look after” certain creditors, for example. 

But, what about when you believe a fellow director is acting in breach of these duties?  Where does that leave you? 

As insolvency practitioners we are seeing an increase in management disputes where one director rolls out a list of failings or perceived breaches undertaken by their fellow director(s).  The key issue with acknowledging the failings of others is just that; you are aware your fellow director may be breaching their duties.  Again, the court has said, “If you are aware a director is in breach of their duties and you are not seen to actively challenge that conduct, then, by default, you assent to it and accordingly, are equally liable for any losses the company suffers.”

While the court’s view may seem harsh, it emphasises the level of responsibility resting on a director’s  shoulders and the fact a director owes a duty to the company and not to any other director or shareholder. 

Should you believe a fellow director is breaching their duties then you must demonstrate you have challenged their conduct.  Keep a written record of your concerns, including any correspondence (such as emails) between you.  If appropriate, convene a meeting of directors as a possible means to discuss the issue and resolve how to remedy the position.  If all fails, seek early independent advice to consider how to protect your position.  Doing  nothing could prove costly.

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