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!
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.
PBC launch new magazine
PBC are pleased to announce the launch of a new magazine, The Leaf.
The first edition was issued earlier this week, but can also be read here. If you wish to be added to the mailing list for future editions, please contact us.
Solvent Liquidation – What is it and who can use it?
We are often asked ‘what is solvent liquidation’ and ‘is it suitable for me’? In this video, Gavin Bates, one of our licensed insolvency practitioners explains the meaning of solvent liquidation and gives some clear examples of when it can be used, what it is used for and what you can expect should you decide it is for you.
PLEASE NOTE:
Solvent liquidation is not suitable if you are in difficulties financially. Please see our other videos for solutions to financial problems.
What is Bankruptcy?
Personal insolvency, including bankruptcy is something that nobody wants to face. In this video Gavin Bates, one of our directors , explains a little more about what insolvency means, other options to potentially avoid bankruptcy and what could happen if you do need to take the bankruptcy option. Many people come to PBC with questions such as ‘will I lose my house if I take bankruptcy’ and ‘what about my car and other basic needs’ these are difficult questions and the answer will vary depending on your circumstances but we will work with you to make life improve as fast as possible. For many people, the relief of seeing a solution to their issues is the first sign that they are re-stabilising their life and turning the corner towards becoming solvent again. While the road may still be difficult (and we may not always say what you want to hear) talking and taking some advice could be the first step on your journey.
When do I need an Insolvency Practitioner?
Do have a dog but try to bark yourself? They (dogs) are pretty good at it and are certainly better than me so I tend to let them do what they are better at!
So, why is there an apparent reluctance to consult with an insolvency practitioner (“IP”) until the very last minute, if at all? I will say now I have a huge amount of respect for those who come to see me. After all I am a stranger to them and they are being asked to reveal all of their issues on a point of trust I may steer them in the right direction.
Some of the subjects we have been approached to assist on include:
- A customer has gone insolvent and the creditor is unaware of their rights or need guidance on the meaning of documents received.
- A business is being handled by an administrator (or liquidator) and you are interested in the acquisition.
- The IP is telling you that the goods you supplied are going to be sold for the benefit of creditors as a whole but what are your rights?
- An IP is threatening me with all sorts of monetary claims.
- My credit card and other domestic debts are out of control.
- Our company is in financial difficulty.
The insolvency business is a highly specialised area with less than 1,100 appointment-taking IPs in the UK. The governing legislation provides some immense powers such as lifting the corporate veil and pursuing company officers personally for losses resulting from their conduct, the rights of landlords or suppliers can be controlled, or even prevented. Contacting an IP at an early stage may make the necessary route you need to take smoother, it may even mean you have more than one option. Leaving it until things are getting to a critical level often leads to a very costly and damaging outcome.
For those who need convincing, in a case I am looking at a gentleman tried to handle a bankruptcy petition that had been presented against him in person. Because he did not appreciate the court procedures he ended up being made bankrupt. His asset value (home and land) is over double that of his principal debts but he is now facing the prospect of losing his home in order to clear the bankruptcy and the costs inherent with bankruptcy. Had he taken timely advice this could have been avoided and the anticipated cost a fraction of what they are now going to be.
So, the message is clear. IPs are not monsters and are there to bark for you when the highly specialised subject of insolvency comes looming.
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.
So what went wrong?
“If you fail to plan then plan to fail”. A well-known phrase that everyone in business should have hanging in a prominent place as a reminder that operating a business carries risk as well as reward.
Nobody takes that brave leap into being self-employed thinking their business will fail within the first two years. However, many start-ups find themselves in difficulties within this time frame, generally as a direct result of a failure to plan. I appreciate I will not win many friends by saying this but the business acumen in this country is poor and the general knowledge required absent. If I had a pound for every time a director referred to the assets of a limited company as his assets when they are actually company property………
Putting it another way, if you build a house on poor foundations then you can expect that house to fall down eventually. Similarly, if you do not start a business on sound footing from the outset you are promoting failure.
This article could dominate several pages if I were to go into any real detail but, generally speaking common areas leading to difficulties in the near future of a start-up include:
- No business plan (including cash flow forecasts) from the outset. If you have a business idea then putting that down in writing should inform you if that idea is viable and what is likely to be the requirements. It also supports any application for third party funding, such as from banks.
- Choosing the wrong trading vehicle (e.g. limited company, partnership etc.).
- Over-borrowing from the outset, leaving start-up costs creating a financial commitment that eventually becomes a burden too great.
- Not registering for VAT or PAYE. In one case I handled the company had been over the VAT threshold requirements for three years yet was not VAT registered. It was one of the grounds for him receiving a custodial sentence!
- Not accounting for receipts and payments properly.
- Entering into contractual obligations without fully understanding the implications.
- No trading terms and conditions upon which to fall upon when things go wrong.
- Not monitoring cash flow. Most business failures have reached a stage where cash is exhausted so they cannot pay the bills.
The advice to any would-be new business owner is to take advice. Speak to an accountant who can help you determine what the appropriate trading vehicle for your business is, assist with VAT registration and guide you through how to ensure your day-to-day accounting is correct. Equally, a commercial solicitor can draw up your terms of trade that maximise protecting your business interests and can steer you with regards to any agreements you are asked to sign. Finally, do not overlook the role of commercial banks as they can assist in the most appropriate form of funding the business, both at start up and going forward.
I use a phrase, “You do not have a dog and yet bark yourself.” Unfortunately, all too often business people come to me and it is clear they have not grasped that concept.
If you require any advice or assistance on mediation matters, or any other insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation. Call Gary Pettit or Gavin Bates on 01604 212150 completely confidentially.