Welcome to our April Newsletter
After two long years of Covid-19 restrictions for businesses that has seen so many companies struggle to survive and many having gone to the wall we are finally free.
Or so we thought. When Russian tanks crossed the border into Ukraine another crisis has hit British industry as oil prices rocketed and firms linked to the former Soviet Union have pulled their ties with Putin's nation.
With inflation running at six or more percent and the projected level expected to be close to double figures this year these are headaches we could all do without. And I haven't mentioned the huge rise in energy costs and the tax hikes announced by the Chancellor Rishi Sunak.
ICSM has had its ear to the ground predicting which businesses are likely to struggle, who may be paying their suppliers late and who may be about to go bust.
One major bad debt can set a business back years at best or send it to the wall at the worst so it is vital to get credit intelligence from ICSM to stay one step ahead.
Don't write off debts
If customers begin to pay late then ICSM's FREE legal letters are available for members to use online to chase up late payers and chase down long overdue invoices which have around an 80% success rate. (See how easy it is with this video:
We even have a micro debt service which nets those smaller unpaid invoices which you may have given up on. Even if an invoice for, say for instance of £95, has not been paid for months or even years this service has settled many overdue accounts - indeed ICSM has brought in thousands of pounds of lost invoices for our members.
We have an excellent record in debt collection with a diplomatic but effective service led by Paul Carrotte who has successfully brought in tens of thousands of pounds for members last year - if you have a problem debt contact Paul on 0844 854 1850.
Struck off notice
And a new service we have introduced this year is an early warning if one of your customers receives a Companies House “Notification of intent to strike them off the records.” Don't forget a business can be struck off even if it is still trading due to not filing accounts and failing to reply to warnings, and will simply not exist officially. It's seen as an early sign of trouble ahead and you will be the last to know. If this is of interest – email Ian.carrotte@icsmcredit.com or call him on 0844 854 1850 to see if this could be a benefit and save you money when customers go bust.
In this issue we have stories that illustrate the times we live in from the effects of the Ukraine war on business to what you can do to prevent problems due to the economy.
As always we have a list of the Runners and Riders - firms who have gone bust recently - broken into different industry sectors to make it easier to read.
These are difficult times but those who are of an age will have been through a lot worse in the past - and come out the other side.
Kind regards
Ian Carrotte
Proprietor of ICSM Credit
PS: Please note as part of our systems maintenance and upgrade to the new API, we will be carrying out a ‘Spring clean’ on old archived saved reports. All old reports saved prior to December 2019 will be deleted as they are obviously out of date. If anyone has a specific requirement to keep their 'Old Reports' in an archive, please let us know so that we can discuss.
For details about ICSM Credit call 0844 854 1850 or visit the website
or email Ian at Ian.carrotte@icsmcredit.com
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NEWS
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P&O Ferries: a massive PR disaster - when there were legal (and common sense) options to take to turn the firm around
Anger, frustration and incredulity are just some of the emotions created by the P&O’s decision to fire 800 staff from its various UK ferry routes last week writes Harry Mottram.
In a rare show of unity both Conservative and Labour MPs condemned the decision to fire and rehire their UK workforce despite the Government talking out a proposed law from Labour last year that would have prevented the practice.
The Prime Minister Boris Johnson has declared the decision illegal and during a parliamentary committee meeting P&O Ferries boss Peter Hebblethwaite admitted the firm had broken the law by not consulting the unions.
He claimed that it was the only course of action that could save the firm from collapse explaining the ferry operation was losing money and was no longer viable. By replacing the staff with agency workers on far lower wages he said the firm could survive although it would be paying out £36.5 million in redundancy settlements.
However, the company had other options including calling in administrators to guide the firm through to solvency which may have seen cost savings in the shape of redundancies and a scaling back of its services, liquidation, a sale of its assets, negotiating a Company Voluntary Arrangement (CVA) or even finding a buyer.
The parent company DP World based in Dubai could also have continued to subsidise the ferries until business picked up following two years of losses caused by the Covid crisis. MPs pointed out at the committee grilling of Peter Hebblethwaite that DP World had spent £147 million on sponsoring a golf tournament and paying £270 million dividends to shareholders. In 2020 the firm lost £105m according to the accounts – reported The Guardian.
P&O have taken a massive public relations hit over the affair and could end up failing if the Government insists on their £11 million in furlough payments being repaid or they declare the ferries are not seaworthy and revoke their licences. There is also a possibility of a consumer boycott plunging their operation into further problems – while all the time the Danish firm Det Forenede Dampskibs-Selskab (DFDS) and Irish Ferries must be relishing the prospect that their rival for the Dover-Calais crossing is in crisis. Likewise, Brittany Ferries may also pick up trade from P&O with their cross-channel routes to west France - and Stena Line also have ferries connecting to Europe and Ireland from the UK. And of course, the Channel Tunnel may see more business as a result.
If P&O had taken one of the legal routes to solve their financial problems, then the fall-out (which could still include collapse) would have been avoided. It is a lesson in how not to handle massive losses for a business in an industry that should be able to survive as long as England remains separated from France by the English Channel.
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ICSM News: the retailers who have gone bust this year despite Covid regulations relaxed
Customers and suppliers of the online retailer Luxury Home Furniture Limited, trading as “Shabby”, may be out of pocket after the Bradford based business entered administration in February.
The administrators Inquesta Corporate Recovery & Insolvency have said they are trying to find a buyer but they said Shabby has insufficient cash to fulfil outstanding orders or to provide refunds to customers awaiting goods. Company Rescue reported that customers should contact their credit or debit card provider or payment platform to arrange a chargeback where possible.
It's an ill omen as more retailers since Christmas are hitting the buffers in the first weeks of the year. This month Dawnfresh called in administrators laying off 200 workers in Uddington north of the border while selling its Arbroath plant.
Another casualty is Studio Retail in Accrington with 1,500 staff that has entered administration in February. They specialised in clothing, electricals, homeware and gifts. Two more victims of insolvency are Big Home Shop who sell garden furniture and Physioroom who sell exercise equipment.
Trinity Group hit the rocks in January – they are a ‘heritage’ fashion businesses that includes Kent & Curwen, Gieves & Hawkes, D’Urban (Japan) and Cerruti. These companies are also currently being liquidated: BML Fashion Limited, Colson Retail Limited, First Care Fashions, Greenwoods Kitchen, S & S Records and many more as listed in ICSM’s regular newsletters.
ICSM said it was a tragedy so many retailers are going bust as they were supplied by a long list of businesses many of which will not only not get paid but have lost a customer.
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How the Ukraine crisis will hit your business - and what you can do about it
The war in the Ukraine has redefined the world order – not just politically but economically as well. Back in the days of the Cold War there was a divide between the capitalist come mixed economies of the West and the Communist or state-controlled industries of the Eastern nations dominated by the Soviet Union.
Now the same seems to be happening as the West finally realises that Russia controlled by the dictator Putin wants to conquer whole chunks of Europe. It’s led to a schism not seen since the end of the Second World War in 1945. Russia has been isolated due to its aggression and war crimes as it attempts to blast Ukraine into submission. But to cut off the Russian economy comes at a price to British industry and here are some of the costs coming our way which could see many firms struggle and others go to the wall.
1 Oil and Diesel prices
Already filling up a van at a motorway service station has seen prices go over £1.90 a litre while nationally they are not far behind while supermarket diesel is around £1.80 and rising. Petrol is closer to £1.70 a litre but is set to rise as oil shoots past the $100 a barrel and continues to rise. Every single delivery and every single sales rep shooting off to see clients brings a hike in overheads – and prices are set to increase further with the average saloon or small van being filled up for just south of £100 - and that's taking into account the Chancellor's 5p off a litre. The rises are not just to do with the war in Ukraine although that’s sent the international markets into a panic as Russia produces around 10% of the world’s black stuff. Meanwhile under pressure from the Government BP has offloaded its 20% stake in Rosneft the Russian oil giant owned by the state slashing its potential profits and potentially jobs ahead of a further price rise as margins are cut.
2 Gas prices
Heating your office or factory is an expensive business and is set to become more expensive with gas prices rising in some cases by almost a third. Last year around 20 energy suppliers went bust as the prices hit the price cap set by Ofgem meant they couldn’t make a profit and with no reserves were insolvent. With a major hike last year prices this year are anticipated to rise according to Energy UK by 50%. Hot weather in Asia – gas is used for air conditioning – and cold weather in Europe has increased demand but the Ukraine war Russia is effectively being frozen out as a supplier to much of Europe meaning most nations are scrambling around to find new suppliers in North Africa and the Middle east – sending up prices. We get about 5% from Russia so we shouldn’t be short of the stuff – but prices are hitting all time highs despite all that gas under the North Sea. These kind of rises mean an average small office with just a couple of rooms will see a monthly bill of over £100 – potentially rising to £170 this year or around £2,000 per annum.
3 Exports and Imports
In the great scheme of things exports to Russia are nothing like as much as they are to the EU. In 2020 we exported £2.1 billion and imported £19 billion in goods with 40% from energy and 11% from non-ferrous metal. Around 4,000 firms trade with Russia but now that figure could be cut drastically – whether its refitting super yachts or exporting luxury cars – trade is set to all but stop.
4 Inflation
Already on the rise inflation is running above 5% and set to hit double digits potentially as oil, gas, diesel, food and just about everything else rises in prices – driven up by energy increases. That means your products or services need to rise in price if you are to keep up with inflation. In most cases passing on price rises may not be an option. Instead many in business look elsewhere to make savings. Salaries? Rent? Suppliers? It’s tricky – and will mean in reality inflation will hit the bottom line.
5 Interest rates
Spare a thought for the Russian consumer – they have interest rates now of 20% after the Rouble all but collapsed in March after the Western nations pulled the plug on many payment methods including the SWIFT scheme. The Bank of England is likely to hike rates in order to keep inflation under control. That means borrowing is more expensive and overdrafts gather increased costs. All of which hit business. The war may not cause interest rate rises but it is a factor in the Bank of England’s calculations. And that means businesses take a hit – as do consumers who have less cash to spend creating a spiral of stagflation.
Advice from ICSM
All of these factors mean it is more expensive to run a business. There are some basic decisions to make in order to stay solvent – and come out the other side when things improve as they will do.
1 Reduce costs with old fashioned insulation – draft excluders and insulating roof spaces – and turning down the heating and wearing a jacket indoors. Not popular with everyone in an office – but practical. Putting a tracker on company cars can prevent reps from taking the scenic route – shall we say. Cutting speeds by a few miles an hour on long journeys saves cash as does ensuring vans are not carrying unnecessary luggage.
2 If it’s a very small office then working from home can save a big cost – but for many this is not possible due to a lack of space. Many a business has started from a lock up or a garden shed – again no good for larger concerns although sharing space with a complementary business can work.
3 Sell off any surplus and hardly used kit and materials.
4 Consolidate working space for production to save money on rent and energy and if you own it lease or rent the extra room.
5 Check all you insurances, loans and utility bills and see if there is a cheaper supplier.
6 Try not to take on any new loans. If you have outstanding debts concentrate on paying them off first.
7 Shorten your payment terms for new customers to increase cash flow. Use ICSM’s micro debt service and our FREE legal letters to chase up long overdue payments. Most firms have many invoices that go unpaid and are written off. Don’t write them off as using ICSM you could be paid even if the invoices are years overdue.
8 Get tough with late payers – remember what happened with Carillion? They expected suppliers to wait up to 120 days to get paid – which meant when they went bust they lost four months of invoices. ICSM’s debt collection service brings in tens of thousands of pounds a year for members.
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More stories: check our website for news on logistics, construction, hospitality, printing and publishing - and much more
PLUS: ICSM on Company Voluntary Arrangements as retailer Ann Summers exits its CVA after increasing its online retailing
PLUS: New service from ICSM for members: company strike off alerts
PLUS: ICSM NEWS: Russian businesses are in trouble and the Oligarchs have nowhere to berth their super yachts - concerns mount if they can pay their suppliers
PLUS: Another business bites the dust as the fall out from the Russian invasion of Ukraine continues https://www.icsmcredit.com/news/viewpost.php?id=529
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Who has gone bust lately?
Runners and Riders
Below is a collated list taken from the Government’s London Gazette of various businesses who are experiencing problems in the last few weeks. It is not a completely comprehensive listing but gives most of those who have hit the rocks.
We have broken them into different sections to make it easier to see and we have included the company number in each case.
This list includes some notable firms we have taken an interest including Abbey Printers of Bradford and Simplicity Energy.
CONSTRUCTION: DEVELOPERS, SURVEYORS, BUILDING TRADES
Administrators Appointed
Alpha Homes (Leicester) Limited 04594955
High Street GRP Limited 07831810
P3Eco (Bicester) Himley Limited 07361204
PDR Construction Limited 10811082
Project7 Construction Limited 04467754
QSSQ Limited 11782264
Stilebridge Groundwork Limited 07474343
The Cool Walls Company (UK) Limited 10409465
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
Crystal Click Construction Limited 10116725
Ecore Construction Construction Management Limited 10090538
JFL Building Limited 10498659
Hillwood Precast Finishing Limited 06417328
Option Construction and Interiors Limited 10100180
Siman Construction Limited 09992052
St George’s Paving Limited 11689897
Liquidators Appointed
BRL Construction Limited 11723118
Denmark & White Limited 04158866
Ginte Driving Services Limited 10439649
H R Ceilings Limited 09747719
P & F Construction Limited 11511856
Suffolk Cladding Limited 10901033
Members Voluntary Liquidations
AWCS Limited 06527426
Petitions to Wind Up
RES Land and New Homes Limited 10113293
Winding Up Dismissal
Mar City PLC 05181121
Winding Up Orders
DS Carpentry Roofing and Building Ltd 11819434
HOSPITALITY: CAFES, DRINK, FOOD, HOLIDAYS, HOTELS, LEISURE, PUBS, RESTAURANTS, TRAVEL
Administrators Appointments
The West Berkshire Brewery Plc 03667842
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
Camelot Conferences International Limited 10016885
Dockers Spirit Company Limited 11586879
Elina Foods Limited 08480668
K & R Coffee Limited 11982247
Koala Pub Company Limited 12857480
The Edgbaston Hotel Limited 08151595
Ultimate Cafe the Interesting Eating Company Limited 09034027
Liquidators Appointed
365 Hospitality Catering Limited 08580373
Aglow Travel Limited 08679326
AMA. Hospitality Limited 10368534
A B Coach Travel Limited 10580858
Charterhouse Leisure Limited 11570040
Flames Gourmet Grill Limited 10987048
G B Pubs (Midlands) Limited 10978932
Heat African Bar & Restaurant Limited 11976116
Holme Valley Inns Limited 08753701
KM Foods (London) Limited 11164854
Number 1 Entertainment Limited 12003243
Paragon Restaurants Limited 11101715
Pizza Plaza 2 Limited 10426295
Railway Inn Ireleth Limited 08891892
RK Southwest Limited 12243374
Royel Hotels (UK) Limited 08320961
Sixty Shilling Pubs Limited 08062518
St Aimie’s Sports Academy Community Interest Company 10534175
SNA Midlands Limited 12109995
Sorano Pizzeria Limited 10553308
Southwest Taxi Hire Limited 01849183
State of the Art Restaurants Limited 02931276
The Caxton Pub Limited 11378060
Urban Arcades Limited 11786633
West Midlands Bright Bar Limited 07007041
Wharf Inns Limited 12418285
Members Voluntary Liquidations
Chef`s Trolley Limited 03938203
Childhay Manor Ice Cream Limited 05423900
Churchill`s Fine Foods Ltd 05083976
Direct Seafoods Scotland Limited 06014697
IML Pubs Limited 05032496
JHF Events Limited 11904733
Kelly Leisure Limited 07846476
KFG Restaurants Limited 06358999
L & C Leisure Limited 04947398
Peak Escapes Limited 09876955
Pullman Foods Limited 05847307
William Hill (Products) Limited 03760422
William Hill (Supplies) Limited 03272450
Petitions to Wind Up
Broadway Bar and Grill Limited 10605023
Winding Up Orders
Choco Coffee Limited 12176664
Lewis Catering (Midlands) Limited 10458388
Tea Foods Limited 06034706
Westgate Club and Institute (Grantham) Limited IP12154R
LOGISTICS: COURIERS, HAULAGE, ROAD, RAIL, SHIPPING, STORAGE
Administrators Appointed
Pyramid Self storage Limited 10057251
SMV Transport Limited 09792159
Sterling Shipping Agencies Limited 11228478
TMA Couriers Limited 12457011
Wilson’s Express Same Day Limited 03899942
Compulsory Liquidator Appointed
BKW Transportation Limited 10048726
E&R To B Transport Limited 11014618
Ipswich Vehicle Refinishers (UK) Limited 09151033
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
Specialist Storage Solutions Limited 11695851
Streamline dispatch UK Limited 09782046
Liquidators Appointed
Alan Haulage Limited 09599528
ABSL Logistics Limited 11065448
A B Coach Travel Limited 10580858
Basra Transport Limited 11238549
Europe Express Boston Limited 12073199
Hashmi Couriers Limited 10753436
Industrial Plant Hire Limited 12216244
London Smokehouse Limited 10807302
Lux Car Rental Limited LUX 11480336
Motofly Limited 06413469
Omega Logistics Ltd 05675235
Sleeper Buses Limited 06780185
Venti Aviation Group Limited 12385847
Members Voluntary Liquidations
AA Garage Services Limited 12916064
Merman Shipping (UK) Limited 05441982
R. J. K. Vehicle Services Limited 04427226
Petitions to Wind Up
Eagle Express Couriers Limited 04628974
Winding Up Orders
Eagle Express Couriers Limited 09505760
Winding Up Dismissal
Linney Refridgerated Transport Limited 09955489
MEDIA: ADVERTISING AGENCIES, DESIGN STUDIOS, EXHIBITIONS, EVENTS, PRINTERS, PUBLISHERS, PAPER & INK MAUNUFACTURERS, MARKETING, MEDIA, PUBLIC RELATIONS, SIGN INDUSTRY
Administrators Appointed
Invisible Creations Limited 11945108
V Communications Limited 10899363
Compulsory Liquidators Appointed S 136
Larkhark Films Limited 08400617
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
Abbey Printers of Bradford Limited 03060023
Alfabet Screenprint Limited 01997424
Ansa Media Limited 10680337
Camelot Conferences International Limited 10016885
CRE8 Events Limited 10961542
Daytona Visual Marketing Limited 01450630
Ghost Signs Limited 08502351
Hagen Communications Limited 11488541
Imagination Marketing Systems Limited 04002752
Jigsaw Designs Limited 08457651
Makermet Creative Limited 08735759
Start Media Services Limited 10579159
Upgrade Pack Limited 11309189
Wyoming Studios Limited 04002749
Liquidators Appointed
69 Magazine Limited 05186456
AM Leaflet and Distribution Limited 04212557
Bespoak Framing Limited 09565613
Blue Light Events Limited 12350891
C A Design Limited 03073124
Dale Communications (UK) Limited 08046794
Fleetpoint Media Limited 08039999
Haselberg Arts Limited 10670541
Indigo Press Limited 02740300
JK Film Editing Limited 12160297
Kudos Design and Print Group Limited 07237137
Resource Marketing Limited 03359703
RMM Digital Publishing Limited 04263720
PS Media Limited 11028335
Monkeypuzzle Marketing Limited 05758551
TBM Marketing Limited 06695233
Townpages Limited 07180580
UK Graphic Installs Limited 07963413
United Design Management Limited 08433944
United Design Partnership Limited 07672233
Viewpoint Marketing Services Limited 06321099
Wow Video Production Limited 07299479
Members Voluntary Liquidations
DJP Marketing & Promotions Limited 08065185
Esher Mail Order Limited 00981703
Evenmedia Limited 04009424
Flake Creative Limited 10549066
Hazar Publishing Limited 01888537
Iron Men Films Limited 10131242
Petitions to Wind Up
Crepa and Waffla Limited 12275271
Winding Up Orders
2Fold Print Limited 10759445
Mums in Business Limited 11460606
SALES: HIGH STREET TRADERS, RETAIL, SHOPPING CENTRES & MARKETS, WHOLESALERS
Administrators Appointed
Nordic Style Sweden Limited 07101846
Compulsory Liquidators Appointed S 136
Ford News Limited 04412544
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
ELS Clothing Limited 07325211
Fair Price Mini Market Limited 09188456
Wellcome Consumer Products Limited 02873615
Liquidators Appointed
AMB Food4You Limited 08467291
A & M ULTIMATE FASHION LIMITED 09852113
BML Fashion Limited 02957612
Colson Retail Limited 08942561
D & M Machinery Limited 03594193
ELS Clothing Limited 07325211
First Care Fashions Limited 12343610
Freeze Factory Limited 04045036
Good Hands Hairdressers Limited 10088109
Greenwoods Kitchen Limited 11674026
KB Interior Supplies Limited 11946036
Leeds Tyres Limited 12468260
Prestige Empire Limited 08824642
S & S Records Limited 09004325
Smiths Car Sales of Staffordshire Limited 09199457
Simpers Catering Equipment and Furniture Hire Limited 10335516
South Coast Woodburners Limited 08631706
The Essential Sports Company Limited 02823184
WNK Healthy & Cosmetics Limited 11673299
Yourmoto.Bike Limited 09335833
Members Voluntary Liquidations
Midland Army & Navy Stores Limited 02830511
Petitions to Wind Up
LDN Fashion and Design Limited 12046580
Redhat Gaming Limited 11942973
The GC Organisation Limited 10815586
Winding Up Orders
4 Less Group UK Limited 10226615
4U Fashions Limited 10336962
VARIOUS: EDUCATION, FOOD AND DRINK MAKERS, ENGINEERING, ENERGY AND POWER, FINANCE, MANUFACTURING, RAG TRADE
Administrators Appointed
BDL Tool & Die Engineering Limited 06954252
L.G. Kimber (Engineering) Limited 01263948
Simply Your Energy Limited 07243637
Stortford Sheet Metal Limited 05541934
Creditors’ Voluntary Liquidation Deemed in Consent Meetings
1972 Limited 07708223
Camila Prada Tableware Limited 08269515
Liptons Food & Wine Limited 03048008
Stiefel Laboratories Limited 01633638
Newcastle Steel Company Limited 11551368
Liquidators Appointed
GS Plastics Limited 11228316
Halcyon Design and Manufacturing Limited 05174248
Honda Parts Garage Limited 11934566
Simplicity Energy Limited 10611082
Springett Engineering Design Limited 06177543
Members Voluntary Liquidations
Eldwick Food & Wine Centre Limited 04746876
George Herd Ships Stores Limited 04640101
Gestamp Washington UK 03545937
Interhigh Education (No1) Limited 09403006
Interhigh Education Limited 10664061
Residential Mortgage Securities 29 10510806
Westcountry Utilities Devon & Cornwall Limited 08209146
Petitions to Wind Up
GIS Forestry Limited 08923733
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Types of Insolvency
Administration
Administration applies to limited companies and partnerships and is intended to get the company out of trouble and trading again if possible. Administrators can be appointed to a company that is unable, or is likely to become unable, to pay its debts. They can be appointed by the courts (on application from a creditor, directors or partners), the holder of a qualifying floating charge over the assets of the business, or the company or its directors. An administrator's primary goal is to rescue the company as a going concern. If this isn't possible, the administrator will try to get a better result for the creditors than would be possible if the company was wound up. If neither of these is possible, the administrator will sell the company's property to make at least a partial payment to one or more secured or preferential creditors, such as employees or the bank.
Administrators Meetings Para 51
This statement by the administrator of his proposals must be accompanied by an invitation to an initial creditors' meeting (Sch B1, para 51(1)).
Bankruptcy
This can only apply to individuals (including sole traders and individual members of a partnership). Bankruptcy petitions may be presented to the court by the individual, by creditors who are owed £750 or more, or by the supervisor of an individual voluntary arrangement. A bankruptcy order is made by the court.
Company Voluntary Arrangement (CVA)
A company comes to an arrangement with its creditors to pay the debts in full or in part over time. A CVA begins with the company (or its adviser) drafting a formal proposal at a Creditors' Meeting to pay part or all of the debts. If the proposal is accepted by the creditors, the arrangement will become legally binding and the directors will retain control of the company.
Compulsory Liquidation
This is the winding up of a company or a partnership by a court order (a winding up order). A petition is normally presented to the court by a creditor stating that he or she is owed a sum of money by the company and that the company cannot pay.
The Official Receiver becomes liquidator when the order is made but an Insolvency Practitioner will be appointed to take over if the company has significant assets. The liquidator's role is to realise the company's assets, pay all the fees and charges arising from the liquidation, and pay the creditors as far as funds allow in a strict order of priority.
Compulsory Liquidators Appointed S 136
When a winding-up order has been made, the Official Receiver is initially appointed as liquidator (section 136, IA 1986). The company's creditors and contributories may appoint another individual, who must be a registered insolvency practitioner, to act as liquidator (section 139, IA 1986). More than one liquidator can be appointed to act jointly.
Creditors' Voluntary Liquidation
Here the shareholders pass a resolution to wind the company up without the need for a court order. A Creditors' Meeting is held to nominate the appointment of a liquidator and consider a statement of affairs. Creditors can appoint a committee to work with the liquidator, whose role is to realise the company's assets, pay all the fees and charges arising from the liquidation, and pay the creditors as far as funds allow in a strict order of priority.
Creditors' Voluntary Liquidation Deemed in Consent Meeting
Creditors are now 'deemed to have consented' to a decision or resolution if 10% of creditors (by value) have not objected to it. In other words, if objections are not received by the specified decision date, creditors are 'deemed to have consented' to the decision or resolution.
Individual Voluntary Arrangement (IVA)
An individual comes to an arrangement with creditors to pay his/her debts in full or in part over time as an alternative to bankruptcy. The arrangement is set up by a licensed Insolvency Practitioner who will put it to a meeting of creditors. If the proposal is accepted at the meeting, the agreement reached with the creditors will be legally binding. An Interim Order is sometimes issued by a court and will immediately protect the debtor from any legal action by creditors.
Petitions to Wind Up
A winding up petition is a legal notice put forward to the court by a creditor. The application, in effect, asks the court to liquidate the company as they believe the company is insolvent. Proceeds of the liquidation can be used to pay back creditors.
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ICSM CREDIT
For information on ICSM visit
or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850.
