Liquidation Advice as Circumstances Change

I get it.  No one ever rushes to instruct me to wind up their only potential source of income (and the ongoing ability to meet their housing costs).  Particularly, it is right that you do your research and understand as much about the process as you can so that you can task the individual you instruct (and it is a person you are instructing rather than a Company) to deliver the output which has the best chance of matching your wishes.    

About here though it becomes a bit more complicated......   

A Liquidator has multiple responsibilities and masters.  They are in a permanent state of conflict. 

Just because you think your proposed appointee will look after you does not mean that at some time in the future they will not be issuing proceedings against you for something you did in the period leading up to the liquidation.  Similarly, spending too much time trying to establish which Insolvency Practitioner will provide you with the best outcome can be a false economy.  It is not uncommon for the facts of a particular case to change quickly over time.  A suggested strategy and course of action on Monday may not still  be available on Friday.   Yes it can be that quick. 

 

And finally, we are enter an increasingly regulated world.  An Insolvency Practitioner’s role is not akin to entering IKEA with the expectation of buying a wardrobe, walking around the store then picking it up at the exit after reviewing the potential options. Insolvency Practitioners have to compile bespoke documents and information relating to the Company, assist with certain investigations and comply with statutory obligations which you cannot decline to pay for. 

 

This all takes time and requires the cooperation and engagement of the client Directors to provide answers and information in a timely manner.  I have seen instructions where, following a request to complete what I accept is a very lengthy questionnaire, what is returned is the completed name and address at the top and duly signed at the bottom, with none of the other requested answers provided.  When questioned the answer is usually:   “Isn’t that what I am paying you for?”   Err no, it is not, we advise on the circumstances rather than attempt to rewrite the facts. 

 

The biggest error that Directors can make is to seek advice and then through a series of decisions guided by such things as over confidence, misguided loyalty, and fright choose to take actions in conflict and opposition with the advice given by the Insolvency Practitioner.    When they return to formalise the instruction there is surprise that what is now being said differs so widely from the first consultation.   Whether the instruction happens or whether they chose to let others make the decision before them, the early consultation acts , not as a support for their decisions, but rather a rod for whomever is appointed in respect of the Company, including the Official Receiver to beat the Directors with. 

 

Not taking a timely decision can become a mistake, as can paying “deserving creditors”  particularly when they are paid in preference to HMRC debt. 

 

So please, We accept this can be very difficult and scary.  Insolvency Practitioners at Frost Group Limited have many years experience, in fact a combined total of about 75 years.  We are very unlikely not to have come across your circumstances and potential actions a number of times.  You are either going to trust us or you are not.   If you are we are here and we can assist.  As I say, we will have come across your circumstances many times before.  But the choice is yours as are the potential liabilities.  

 

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