4 May 2017: When a company enters insolvency, creditors inevitably suffer and their emotions can be raw and tempers raised.
A company’s statement of affairs includes details about creditors and is filed at Companies House for all to see in most insolvencies. A statement of affairs is, fundamentally, a summary of a company’s assets and liabilities at a given date. It does not give any indication of potential wrong doing by the directors.
The filing of the statement of affairs is when opportunity presents for some “ambulance chasers”. Having identified creditors from the list of creditors they target creditors and suggest a number of wrongs will have been committed and that they, the ambulance chasers, are the only people who can help in taking the directors to task – retribution with the carrot of a monetary recovery – if only they are appointed to take the required action.
All insolvency practitioners have a duty to investigate a company’s affairs and to report their findings to the relevant government department and take action to recover funds where possible. In the run up to any insolvency, directors are bound to have been fighting fires and, with the benefit of hindsight, they may have done things less well than they might have. However, this does not necessarily mean that there have been any challengeable transactions or either wrongful or fraudulent trading. It is, however, in all insolvency practitioners interests to pursue such things for the benefit of creditors.
BRI Business Recovery and Insolvency don’t believe in “chasing ambulances” in any way, shape or form and we believe that creditors of insolvent companies should certainly be very wary of jumping from the frying pan into the fire when it is anger that is fuelling their fire and the ambulance chasers fanning the flames. What creditors need to ask is “what is in it for them”?
Should you have any queries or concerns regarding a company’s viability or the actions of directors then call any of BRI’s management team.