Paying by card – know your rights!

Research by the UK Cards Association showed that, in 2016, 77% of national retail sales were made by card. It was also announced in the last few days by the British Retail Consortium that debit card payments overtook cash for the first time, no doubt increased by the use of contactless payment.

Most payments by credit card (including some charge cards) are protected by law: consumers have a legal claim against the card issuer where the goods or services cost between £100 and £30,000 and are not delivered.

In addition, for debit and credit cards (including pre-paid cards), the card schemes provide a system of “chargeback”. Chargeback schemes are voluntary schemes with the terms and conditions set by the card issuer and accordingly the rules vary from issuer to issuer.  However most schemes allow the card issuer to ask the merchant acquirer to reverse a payment made by card with no minimum or maximum limits.

It is unfortunately inevitable that some payments made for services will not be honoured when a retailer enters into insolvency. New guidance issued to insolvency practitioners states the appointed insolvency practitioner must issue a notice on the retailer’s website informing customers of whether their services or goods will be delivered, as well as informing them of the above rights.

The UK Cards Association has also issued a guide to card holder’s rights, which can be found here:

http://www.theukcardsassociation.org.uk/wm_documents/Credit%20and%20debit%20cards%20-%20A%20consumer%20guide%20June%202016%20FINAL.pdf

Ever Decreasing Circles

‘Living beyond means’ – a leading cause of bankruptcy

When you think of Ali Campbell you think of UB40, Shane Filan, Westlife and Martine McCutcheon may bring back memories of “Eastenders”. What they all have in common is being made bankrupt, which goes to prove cash is king.

There is an old joke about the husband who did not report his wife’s card stolen because the thief was spending less than she did. Excluding mortgages, household borrowing in the UK rose to £198 billion and with car financing increasing by 15% and credit card debt by 10% this represents the fastest growth in debt levels since 2005.  Statisticians suggest the average household could last just 32 days without any income and that more than 22% have savings below £500.

This depressing picture is indicative of how austerity has impacted on the general public. However, it does not reflect the true picture because the reports on personal debt do not include “Hidden” liabilities such as personal guarantees for third party borrowing or directors over-drawing on their loan accounts.  The worst case I have seen so far was a former partner of a failed legal practice whose Christmas present in 2014 were demands amounting to £11 million.  Try explaining that to your spouse!

At PBC we see people with personal debts ranging from less than £10,000 up to the poor sole mentioned above. Regardless of the quantum of debt they all endure the same; demand letters, High Court Enforcement Officers, threats of bankruptcy etc.  Admittedly, there are some who consult PBC where bankruptcy is the best option for that individual due to the overall circumstances.  Others, like our client with the unwanted Christmas present, entering into an individual voluntary arrangement (“IVA”) provided certainty and protected his career.

As implied, an IVA is not right for everyone. It is a deal with your creditors; a balanced compromise where there are benefits for both the client and their creditors and demonstrates being more beneficial than bankruptcy.  The key component from the client perspective is you must have something to offer, whether that is an income contribution or tangible offers, or a combination of both.

The principle message has (and will always be) take advice early. The longer you leave debt-related problems the more antagonised your creditors will become, the more cumbersome the debt and the less creditors will be persuaded to support any form of compromise you may wish to put forward.

PBC continue to support business

What is your most valuable business asset? I hope most readers will respond along the lines of,

“Our employees, of course.”

Last year the directors of PBC Business Recovery & Insolvency were delighted to support the Northamptonshire SME Business Awards. In fact, we were so pleased with it that we agreed to support the awards for 2017.  So, what does that have to do with the opening question?  Well, if you acknowledge your staff are your most valuable asset what are you doing to enhance the skill and efficiency of that asset?

The training and development of your staff can be one of the most astute investments a business can make. The more they learn, the more efficient they become and the more efficient they become the more competitive you will be in your field of trade.  Certainly, that has been our experience at PBC where I am not shy in claiming we have a team that is envied by our competition.  Meeting their training needs has brought success and, in turn, the staff have developed into a team that means they support one another in the challenges faced, with the result being PBC meet the expectations of advisors who refer clients to them.

So, why not demonstrate to the business world of Northamptonshire that you also push the training and development of your team.  Enter the 2017 awards and get the promotion you deserve.  You can read about the awards and obtain your application on http://www.northamptonshireawards.co.uk/.

PBC announce payment in full to creditors in a bankruptcy.

PBC are pleased to report a distribution in full plus statutory interest to unsecured creditors in a bankruptcy.

 

The only asset in the bankruptcy was the debtor’s 50% share in the dwelling property, where his ex-partner resided. His ex-partner expressed an interest in purchasing the estates half share.  However, due to personal circumstances she was not in a position to make a market value offer and solicitors were instructed in respect of selling the property.  After protracted negotiation, coupled with an order of the court a sale of the property was completed on 1 December 2016.

 

The bankrupt’s half share of equity was received, creditor claims were agreed and they have received payment in full plus statutory interest. The additional benefit has been the balance of funds being returned to the bankrupt.

 

Gary Pettit of PBC said, “The outcome of this bankruptcy demonstrates the benefit of good negotiation skills, coupled with commercial thinking. It would also be remiss not to recognise the professional work undertaken by Katie Summers of summers nigh law for assisting me in achieving this great result.

PBC announce successful completion of CVA

The most common reasons why businesses fail

PBC are pleased to report a dividend has been declared on a company voluntary arrangement (“CVA”) which was successfully implemented.

When first approached, Gary Pettit was asked how to place the company into liquidation. However, following advice the directors restructured the business with PBC’s guidance and proposed a CVA to its creditors, which was approved without modifications in January 2013.  The CVA included on the sale of a freehold property and moving operations was restructured into one site from three, together with monthly contributions from future trade.

Preferential creditors were paid in full and unsecured creditors have received two distributions overall amounting to just over £79,000.

Gary Pettit said, “This case proves CVAs can help save businesses and preserve jobs. It is really gratifying when you can turn a doom and gloom perception (of directors) into a turnaround situation like this one.”

PBC announce large dividend paid from company voluntary arrangement

PBC logo 1

PBC are pleased to report on the recent payment of a dividend from a company voluntary arrangement (“CVA”).

 

After consulting with a financial consultant and seeking advice from PBC, the company proposed a CVA to its creditors which was approved with modifications in December 2013. The arrangement consisted of a splitting of the company into two distinct trading entities which included the saving of the majority of the employees’ jobs.  The arrangement included the sale of assets and contributions from future profits.

 

Recently, the directors of the company approached the joint supervisors regarding the possibility of varying the arrangement by settling the outstanding amounts due in respect of the monthly contributions and the sales consideration by way of a lump sum payment. The variation was approved by creditors who have now received a distribution earlier than originally expected.  The joint supervisors have distributed over £92,000 to creditors.

 

Joint supervisor Gary Pettit said, “It is always pleasing to be involved in the rescue of both a company and the saving of jobs, both of which have happened in this case. The directors sought advice at an early stage which resulted in the possibility of a rescue option being available to them.  This has allowed the company to turn around its financial situation.”

Local Entrepreneur Wins Young Business Person Award

SME Northants Business Award_Gold Sponsor_2016

Fae Perkins, owner of Northamptonshire hair extensions business, Bond Hair, was crowned ‘Young Business Person of the Year’ at this year’s SME Northamptonshire Awards.

Fae, aged 29, set up her business specialising in professional hair extensions over 8 years ago and was also shortlisted in the Business Innovation and Entrepreneur of the Year categories at the awards ceremony which took place last Thursday evening.

The judges commented “Fae seems to have limitless energy linked to an impressive personal drive.”

Fae runs what she classes a ‘lifestyle business’ on top of holding down a full time position as Marketing Manager for prestigious self-build company, Potton. Fae has maintained and grown her loyal client base regardless of also being dedicated to her full time day job.

The Young Business Person award recognised business talent for those under 30 years of age and was sponsored by Northampton-based firm, PBC.

“I’m really happy that my hard work is recognised, I’m fortunate enough to love both my jobs so it isn’t a chore to work hard” continued Fae. “I never think 17 hour days are anything special, until someone points out that’s 2 days’ work for most people!”

The Young Business Person award was presented by Gary Pettit, Managing Director of Northampton-based business PBC, who said “PBC feel it is important to be part of the business community and were pleased to support this award. The economy needs young people in business and Fae is an excellent example”.

For further information on Bond Hair™ visit http://www.bondhair.com

Charity Craft Fair raises £420.

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PBC would like to thank all those who attended the craft fair earlier this week for their generous donations which have raised £420 for Ronald McDonald Charity Houses.   For more information about PBC’s chosen charity, read here.

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In addition, PBC would like to thank the stallholders who attended, those who baked cakes and the team at the Northampton office for their hard work in making the event a success.

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More events to raise money for Ronald McDonald will be announced shortly, so watch this space.

That was the year that was

PBC Business Recovery & Insolvency proudly sponsor the SME Northamptonshire Business Awards 2016

How many of you can associate with the question, ”Where did [the month] go?” In fact, it does not seem that long ago since I was looking back at 2015 to see what PBC had achieved, yet here I am doing it all over again!

Obviously 2016 will be remembered for the (Brexit) vote on 23 June 2016. It is clear we have a period of uncertainty ahead of us and there have even been claims insolvency practitioners will be extremely busy as a result.  However, at PBC we believe the economy is generally robust and while there will always be losers, there will also be plenty of winners so no need to panic or allow the media to talk us into a recession.

Despite what the pundits say, insolvency numbers have fell year-on-year for the past three years and insolvency practitioners are all bemoaning the general lack of new instructions. To be fair, PBC have experienced a similar trend, although the amount of professional advisors who recommend our services has continued to expand resulting in another year of growth.

I suppose two key events in 2016 were the launch of the PBC mediation service, which has attracted significant interest from solicitors and barristers alike. So far, the service has a 100% success record in settling disputes including a £1 million negligence claim against another insolvency practitioner!  The other point of note was the acquisition of another insolvency practice, Bottomley & Co who were based in Rugby.  As part of that acquisition the re-branded PBC Bottomley & Co moved its operations to Coventry, which provides further potential for work in a wider geographical area.

How many readers have experienced those moments when you wonder why you are working all the hours available and for seemingly little reward?  I am no different.  However, earlier this year an extract of an independent industry report was sent to us that concluded PBC was the 25th fastest growing insolvency practice in the UK and were one of only 62 practices regarded as strong in the industry.  I have to confess a slight puffing out of the chest with pride.  That preceded thanking the PBC team because it is their terrific team spirit and desire to ensure tasks are undertaken in a timely and professional manner that contributed to this independent conclusion.

Outside of our day job PBC have focussed on two specific areas.  The first is to be sponsors of the Northamptonshire SME Awards.  We are so proud to have been involved and it has to be acknowledged the entries received were indicative of how vibrant business is throughout the county.  Secondly and for very personal reasons for Kym Carvell, PBC have chosen the Ronald McDonald House charity as our charity to support for the remainder of 2016 and for next year.  Oh, before you ask, no it has nothing to do with burgers and a big clown!  Check them out in this article where you can find out more.  Alternatively, speak to Kym at our Northampton office.

Gary Pettit

 

 

 

PBC set new ground-breaking law

On Monday 14 November 2016 at 10.12 a.m. Gavin Bates and Gary Pettit from PBC Business Recovery & Insolvency were appointed joint administrators of Bradford Bulls Northern Limited. They were asked to consent to the appointment just over an hour beforehand.

bradford

Bradford Bulls are former World club champions and Super League champions but over the past four years have crashed into a depth of financial difficulties. Faced with a winding up petition presented by HM Revenue & Customs it was administration or just 18 minutes after the administration appointment the club were due to be wound up.

The administration appointment was made by the holder of a floating charge that secured personal lending. Once appointed the administrators expressed some concern the loan agreement may be flawed in terms of the power to enforce its security and having raised this with their solicitors it was agreed to seek court directions to declare the appointment as valid.

For those not involved with insolvency, if the appointment of an administrator is deemed invalid the adminstrator can be held guilty of trespass. Also, the appointment of administrators is determined not only by the date but the TIME of appointment.

Based upon advice two applications were filed, namely:

  1. Seeking a declaration that the appointment by the floating charge holder is valid, or failing that;
  2. The court make an administration order with retrospective effect.

The applications came before Justice Mann in the High Court on Monday 21 November 2016. On considering the applications the judge noted HM Revenue & Customs supported the appointment of Gavin Bates and Gary Pettit and that administration would serve a better purpose for the stakeholders than the alternative of liquidation.  The judge also had to consider whether the court had the power to make the appointment retrospective.  In not doing so he automatically places the adminsitrators in a position where they were trespassers for the previous week.

After considering the insolvency provisions, the benefits of administration and the support from the largest un-connected (and petitioning) creditor Justice Mann decided the court did have the power to make retropsective orders. Rather than consider the legal arguments over the vailidity of the floating charge security he terminated the original appointment with effect from 14 November (ie the date of the original appointment) and made an administration order including the appointment of Gavin and Gary effectively from 10.13 a.m. on Monday 14 November.