Case Study 1: Liquidator increased debt amount after liquidation
Our client’s debt, supposedly, doubled from £60,000 to £120,000 once the Liquidator had taken control of their former company. The Liquidator had no interest in properly reconciling the amount due. All of our client’s requests for help were ignored. The client approached us worried that the Liquidator would follow through on their ‘threats’ to make them bankrupt.
As is all too common in corporate insolvency, the Liquidator’s priority is not the former director. We were able to do an initial assessment of the papers our client had received and then use our considerable experience to approach the Liquidator more formally and robustly.
It took some considerable effort but we were able to get the Liquidator to back down and then put them in a position that they wanted to negotiate a settlement rather than insist on our client’s bankruptcy. We also conducted a reconciliation exercise to show that the amount of the debt was actually far less than the original £60,000 and nothing like the Liquidator’s demands for £120,000.
When we presented all of this information to the Liquidator, we were able to get them to confront the reality of the situation and then take into consideration our fees which had been caused by the Liquidator’s intransigence. Three months after appointment, we agreed a settlement which, including our fees, was £24,900.
Case Study 2: We get £25,000 Directors Loan written-off
Our client approached us as they had received a demand of £25,000 around 8 months after the liquidation started. When the process started they were told they would have no liability whatsoever.
Using our forensic approach, we were able to obtain and then investigate substantial accounting records but the Liquidator fought every step of the way against releasing documentation. Each tranche released showed more issues with the Liquidator’s claims.
After 9 months of correspondence, we were able to show the Liquidator that there was little chance of any recovery and they agreed to write-off the balance and close the liquidation.
Case Study 3: Debt owing delayed, debt owed collected. Liquidation avoided.
Our client’s company was facing insolvency because they simply could not collect the debt that was due to them in time to meet their own obligations. Luckily, they approached us directly for a second opinion after their accountant had recommended a Liquidator. We advised the client that they did not need to liquidate their company and repay a £60,000 Directors Loan. Instead, we could structure four different parts of work to interact and work together to resolve the totality of issues.
We sat between HMRC and the company to stop HMRC taking action to wind-up the company whilst we performed our other roles.
We worked extensively with the debt owed to the company and ensured that older debt, which had been written off in their accounts, was collected within 3 months of the original enquiry. This introduced £50,000 into the company.
Whilst we had been collecting the debt we investigated the tax affairs of the company and were able to file additional returns to legitimately reduce their tax liabilities that had been the catalyst to the original enquiry.
The £50,000 cash injection was able to create a profit allowing the Director to take, as a Shareholder, a one-off dividend which cleared his Directors Loan.
We were able to re-structure the company’s remaining debts owing so that they could be paid over a longer timescale. Whilst this increased the interest paid over the longer run, it had an immediate cashflow benefit which, when coupled with the other work, saved the company and all 5 jobs.
Why do insolved succeed where others fail?
Quite simply, we are specialists in all things insolvency and our principal has 25 years experience in both corporate insolvency and wider financial services. Very few companies operate from the perspective of what do we do now a company has failed and how do we mitigate the effects on the individual?
The liquidator will be busy representing the interests of the company's creditors which is, often, directly against your best interests. The former accountant is responsible to the liquidator for the work they have previously done for you and so, at the very least, they are conflicted.
We are a specialist firm that only complete work on cases that are associated with a Limited Company in Liquidation. By specialising in this way we know all of the specific circumstances, reliefs, mitigation opportunities and genuine ways to avoid either (a) debt or (b) disqualification.
How can you solve my issue?
Principally, we approach any issue as Forensic Accountants. This means that we follow the evidence. Whilst we sit between two parties, we are only appointed to act for you. This means that we are not looking for evidence that supports the case against you (and nor are we required to bring this to anyone's attention) and we concentrate on evidence that suits your position and either drives down the cost of removes a claim against you entirely.
How successful are you?
We successfully remove or significantly reduce a claim in 80% of the cases upon which we are appointed.
Does it affect the Liquidation?
If we are acting in relation to a personal guarantee or disqualification issue then our work has no effect on the liquidation. If we are acting in relation to a liquidator's claims against you (misfeasance, preference, directors loans etc.) then our work would reduce, or remove, the amount you have to pay which would affect the liquidators and, potentially, the creditors of the company but otherwise it would not affect the liquidation process.
How long does it take?
The quickest we have ever resolved an issue is 10 days but it usually takes around 3 to 6 months for us to complete our role because forensic work is painstaking and it will take other parties some time to acquire and provide us with the evidence requested. Once you instruct us, you will have a dedicated named contact that will guide you through the process and they will keep you up to date. Regrettably, other parties are the slowest part of our service but we work to minimise their delays and, of course, any delay usually delays you having to make any payment and so is not against your interests. Rest assured, we will work to balance delays to ensure that they are minimised.
What's involved?
The process for our clients is fairly simple. Once you instruct us, we do all the hard work and review your circumstances in full. You simply sign an authority for us to get the information needed directly from others and once we have the necessary evidence we will work to minimise your exposure.