Helping those that help themselves.
29 August 2018: BRI Business Recovery and Insolvency’s Northampton office are shortly to conclude a creditors’ voluntary liquidation after being appointed in December 2015. Prior to appointment, HMRC had issued a winding-up petition against the company with the director owing circa £100K by way of an overdrawn loan account. The director instructed BRI to ensure a more controlled liquidation with the promise to repay the loan account monthly over a period of years.
Once appointed, the director’s previous promise was immediately broken and, despite repeated requests for a sensible resolution to be obtained, it could not be achieved. The director was warned that the worst case scenario was for BRI to obtain a charging order against his property with the very real potential of forcing possession – something BRI wished to avoid.
Unfortunately, the director decided to do an “ostrich job”. A similar action of the director and the reason for liquidation given HMRC’s substantial and aged liability.
As liquidators, our duty is to maximise realisations for the general body of creditors. In this matter, possession proceedings were granted, bailiff’s instructed to evict the director at 11am and take possession. The director, eventually understanding the seriousness of the position, paid BRI sufficient funds to repay the loan account at 10.30am on the day of eviction.
Whilst all of the above is something we would like to avoid, we have to maximise realisations which has resulted in the secured creditor being paid in full and a distribution to unsecured creditors of 26 pence in the pound.