19 August 2019: We were asked, by an accountant who knows trusts and likes us, to talk with a client who had hit a wrinkle along the road as a result of suing a client for work done and not paid for (at £6,000) who, in response, counter-sued for almost £85k.
The client had already been to see an Insolvency Practitioner (“IP”) who suggested, in short, that they throw in the towel, pay them £10k for which they would “do” a voluntary liquidation, sell them back the assets and they could then carry on through a new company and with few, if any, consequences.
However, the client didn’t want to give up the company name, go through all the hassle (especially as the counter-claim was wholly disputed) and didn’t want to have to find the funds to pay the costs of the insolvency firm concerned in addition to finding funds to buy the assets and provide some working capital.
We then had our chat with them.
We met up, without knowing that they had already been talking to another IP firm. We discussed ways of disentangling the parties – without the need for a liquidation or for any insolvency process. Our approach, which the client and his adviser (a long standing family friend with his own successful business), told us was a “breath of fresh air” compared with what the other practitioners, was all about what was best for the client.
It isn’t rocket science. First understand where you are, where you are trying to get to and what, given all the issues, the available options are. Using the services of an IP may, eventually, be required, we suggested, but beware the advice that gets the insolvency practitioner a fee if you can see no real benefit in it for yourself or for your company’s creditors.
A settlement between the parties has now been agreed; the company, with its ‘phone number, name, good reputation on “trust a trader” etc. etc. can simply continue without the need for a formal insolvency process.
The only ones to come out of this with no more than a cup of coffee (which the client paid for at our initial meeting with them) are BRI Business Recovery and Insolvency because, as anyone who knows us may already be aware, we truly are dedicated to giving clients the right advice first time, every time.