Company applying for Voluntary Insolvency after we issued court proceedings

Discussion in 'Insolvency' started by TheScorpio, Jan 15, 2018.

  1. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Hi All

    We have a client of ours who haven’t paid several invoices; we have gone through the process of issuing court proceedings for unpaid invoices using MCOL. After issuing the court papers, a week or so later we have received a letter from an Insolvency Practitioner, explaining the debtor company have decided to enter in creditor’s voluntary liquidation and steps are being taken to start this, i cannot see any changes on CH or any gazette entries.

    Obviously we are midway through the court proceedings. The IP letter outlines that we need to make a decision on whether we are happy for the IP to continue as the chosen IP or reject, it also includes a form to prove our claims, they have also explained that we should receive a Statement of Affairs before the decision date.

    What are our next steps, I’ve read we can put a stay on the insolvency proceedings (stay of execution), to allow the court proceedings to continue and get judgement by default (If it isn’t defended), then send in sherriffs as there is no IP in charge and they have not yet entered into insolvency but also I’ve read this is pointless as ultimately we cannot stop this insolvency and a CCJ will mean nothing or change anything?

    Any guidance, experience or help would be gratefully received.

    Thanks

    Scorps
     
    Posted: Jan 15, 2018 By: TheScorpio Member since: Mar 2, 2013
    #1
  2. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    The CCJ will be pointless I'm afraid - if an IP is involved the Company is insolvent and seems to need to go into Lqn.

    You would therefore need to get your judgement before the Company enters Liquidation and only then try and recover assets from the Company, which by that point may well have been put into storage for security purposes, if there are any physical assets available.

    I suspect you will therefore be throwing good money after bad.

    Personally I would drop the matter and allow the Lqn to continue.

    Your next decision will be whether to allow the Directors' choice of IP or insist on a meeting to be called for creditors to vote for your own choice of IP.
     
    Posted: Jan 16, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #2
  3. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Hi Lisa

    Thanks for the info, how long after the decision date will a company take to formally enter liquidation stages (At the point we cannot enforce)

    I suspect even though our debt is well into the 1000s there are many others too, im not sure where we stand with regards to voting and until we receive this statement of affairs we cannot judge the companies standing.

    Are we able to hold the Directors liable if they have been doing things wrong, as they have setup another company before this with a similar name and have the same directors doing he same work with the same staff.

    What would an IP be looking for when to look at a Directors behaviour leading up to the insolvency and for how long does it count ? IE if they were asking for work to be done for them or they were still trading, what sort of time frames are we looking at and what other things would a IP be looking into.

    Many Thanks

    Scorps
     
    Posted: Jan 16, 2018 By: TheScorpio Member since: Mar 2, 2013
    #3
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    Posted: Jan 16, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #4
  5. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Hi

    We now have judgement and the company hasn't yet registered the insolvency, the IP has been in touch to say there is delays getting all information. Do you think we could enforce the judgement now before its registered, is it worth checking if they have any other judgements? Thanks.
     
    Posted: Jan 30, 2018 By: TheScorpio Member since: Mar 2, 2013
    #5
  6. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    It's your best chance of getting any money back - I wouldn't worry about other CCJs - just instruct the bailiffs asap if you think there are assets remaining.

    Bear in mind however if they have been preparing for Liquidation I would expect the assets to have been moved to prevent exactly what you are aiming to do...

    Best of luck.
     
    Posted: Jan 30, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #6
  7. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Ive spoke to a couple of HCEOs companies and they have said to tell companies house to put a stay on the insolvency proceedings because we have unfinished business. And then apply for a Writ and then wait the 7 days and send in the HCEOs.?

    Is this something anyone has done, or can advise on.

    Also can someone advise on the best HCEOs to use ?

    Thanks.
     
    Posted: Jan 30, 2018 By: TheScorpio Member since: Mar 2, 2013
    #7
  8. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    As far as I can tell form your earlier posts this will be a voluntary Liquidation so by the time Companies House are notified I think it will be too late - the Company will already be in Liquidation.
     
    Posted: Jan 30, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #8
  9. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Still showing Active on CH ?
     
    Posted: Jan 30, 2018 By: TheScorpio Member since: Mar 2, 2013
    #9
  10. Newchodge

    Newchodge UKBF Big Shot Free Member

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    What is there to prevent an IP writing to potential credtors who issue legal procedings, stating that the debtor is about to go into liquidation, without the debtor ever having any intention of going into liquidation, but, thereby conning the creditor into stopping procedings?
     
    Posted: Jan 30, 2018 By: Newchodge Member since: Nov 8, 2012
    #10
  11. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    This was my thoughts too as i must admit it my me double take the situation but, ive spoken to companies house and they have said we can object to the application to be liquidated to allow the CCJ to be enforced, or at least attempted.
     
    Posted: Jan 30, 2018 By: TheScorpio Member since: Mar 2, 2013
    #11
  12. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    There is no 'application' of Liquidation in a Voluntary Liquidation.
     
    Posted: Jan 31, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #12
  13. LiveNetworks Ltd

    LiveNetworks Ltd UKBF Regular Free Member

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    Lisa can probably confirm this.

    It sounds like they've done a Phoenix which has a limited potential to 'go wrong' and result in liabilities from the old company carry over to the new. Just depends on how well they've been advised.

    I'm assuming that your invoices are for services rather than goods as you'd have had a lien over them and could have recovered them.

    There's also a slim possibility of unfair preference if assets have been moved from the old company to the new company and potentially the liquidator when they do get round to it could consider a recommendation that the directors be barred from holding future directors roles if their conduct falls short.

    Lastly there's always trying to make the best out of a bad deal and subject to cash up front on your terms, trying to get more work from the new company.
     
    Posted: Jan 31, 2018 By: LiveNetworks Ltd Member since: Jan 31, 2018
    #13
  14. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    I think I have missed something - not aware of any Newco or Phoenix mentioned above- just that the existing Co keeps stating it's going into Liquidation but hasn't yet...?
     
    Posted: Jan 31, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #14
  15. LiveNetworks Ltd

    LiveNetworks Ltd UKBF Regular Free Member

    176 39
    2nd Post from the OP

    "Are we able to hold the Directors liable if they have been doing things wrong, as they have setup another company before this with a similar name and have the same directors doing he same work with the same staff."

    Not clear if which is newco/oldco though.
     
    Posted: Jan 31, 2018 By: LiveNetworks Ltd Member since: Jan 31, 2018
    #15
  16. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Yes, it looks like they are starting to use a new company with all same equipment, staff and director in a new location. Weve started High Court Enforcement but had it rejected as the company hasnt filed its accounts and the HCEO class this as not trading so wont enforce. !! Not sure wether to try somewhere else or what options are remaining? Surely the HCEO can attend the addresses and the debtor has to prove they have transferred all items / assets properly at fair value with a proper agreement or sale?
     
    Posted: Feb 1, 2018 By: TheScorpio Member since: Mar 2, 2013
    #16
  17. Mr D

    Mr D UKBF Legend Free Member

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    How would you do high court enforcement against a different company?
     
    Posted: Feb 1, 2018 By: Mr D Member since: Feb 12, 2017
    #17
  18. LiveNetworks Ltd

    LiveNetworks Ltd UKBF Regular Free Member

    176 39
    You can't but the directors could have given unfair preference in moving assets between companies to the detriment of shareholders or creditors.
     
    Posted: Feb 1, 2018 By: LiveNetworks Ltd Member since: Jan 31, 2018
    #18
  19. TheScorpio

    TheScorpio UKBF Newcomer Free Member

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    Yes this is what I was thinking, but we need the HCEOs to go in first to even stand a chance. One of the big players has said they cant do it based on the company not trading anymore. (Only from filing being late). Anyone can file late, it doesn't mean they are not trading.
     
    Posted: Feb 1, 2018 By: TheScorpio Member since: Mar 2, 2013
    #19
  20. Mr D

    Mr D UKBF Legend Free Member

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    If you know they have a new company with new location then is it reasonable to presume old company stopped trading?
    I was under the impression that trading didn't matter, assets do. If it has no assets is there anything to take?
     
    Posted: Feb 1, 2018 By: Mr D Member since: Feb 12, 2017
    #20