Questionable IP actions

Discussion in 'Insolvency' started by mhlayf1, Apr 28, 2020.

  1. mhlayf1

    mhlayf1 UKBF Newcomer Free Member

    10 0
    Hey Everyone,
    Just firing over a bit of info and a few questions regarding some liquidation proceedings.

    I am a creditor to a company that has been declared insolvent and has entered CVL. I, along with other creditors (of which there are many) have some concerns regarding some of the actions so far in the process.

    The company in liquidation has appointed an IP. The IP has accepted a low valuation for the assets/company that was based on a personal valuation by the company director and everything was bought by the company director on behalf of a newco that he set up after the oldco was declared insolvent.

    So not only has there been no independent valuation or marketed sale of the assets but based on the personal valuation the IP has accepted a payment schedule of £3k a month (no payment has been made yet at all) and the creditors were not informed of any valuation or sale. The majority of the stock included in the assets have not even been paid for by the oldco as those creditors are on the creditors list for those orders. The IP has now said that they have instructed a valuation professional but whilst this valuator does his work everyday this newco (same director as oldco) is selling these assets to customers and god knows what he might do with hiding away other assets.

    I have tried to ask the IP for the list of stock/assets the director must have put together with associated invoices to show the IP to ultimately agree that £30k was a fair price and in the best interests of the creditors but this is not being produced so not sure it even exists.

    As this newco has in coming revenue from the assets that have been very dubiously sold he is probably now able to pay back (on a scheme) a very large debt from the oldco that he made himself a personal guarantee for. Also if the valuator does come back and say the assets are worth much much more the director is in a better financial position to pay the difference.

    From investigation so far it looks as though the oldco was insolvent for quite some time, they used all the credit terms they had with suppliers, racked up stock and then entered liquidation buying back the stock for a much much lower price which is only of significant value to him because its mostly branded stock (popular brand). The IP rights for the band belonging to the oldco are in question as well as they were not included as an asset in the sale and generate the majority of revenue.

    Any opinions would be great. I have asked all this of the IP and made him aware of my concerns but I dont know the law down to a tee and I just get "yes it will all be investigated, any info i can send over as creditor would be helpful". I agree this in regards to any misconduct from the business in liquidation but is there misconduct of the IP here?

    What actions should I take if any?

    Thanks

    Mark
     
    Posted: Apr 28, 2020 By: mhlayf1 Member since: Jan 6, 2019
    #1
  2. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,479 2,366
    Cannot help with the insolvency question but can suggest you seriously look at your credit accounts and undertake credit checks before issuing new credit, and fixed credit stop, no more goods untill payment made in full
     
    Posted: Apr 28, 2020 By: Chris Ashdown Member since: Dec 7, 2003
    #2
  3. Mr D

    Mr D UKBF Legend Free Member

    22,072 2,593
    Pay for a new IP?
     
    Posted: Apr 28, 2020 By: Mr D Member since: Feb 12, 2017
    #3
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    3,486 436
    I presume it is too late to vote for a different choice of Liquidator if you have got to the stage where the Liquidator has allegedly agreed a sale to 'Newco'.

    If you feel there has been wrong doing by the IP you can complain here:

    https://www.gov.uk/complain-about-insolvency-practitioner

    What was the date of the Liquidation and on what date did the lqr say they had instructed an agent?
     
    Posted: Apr 28, 2020 By: Lisa Thomas Member since: Apr 20, 2015
    #4
  5. Porky

    Porky UKBF Regular Full Member

    166 64
    Hi

    I am reliably informed that there are legal cases going on where an IP has been sued for damages as a result of selling on assets at an undervaluation.

    The IP must secure the best price for the assets and goodwill of the business. This is their job. It must be advertised for a set period and you are within your rights to request a second more specialist valuation and the advertising process start again. So on your first point you could contact the IP point out that you are considering legal action against THEM for potentially underselling the assets and that you request a second valuation on top of what they are already doing from a totally different independent valuer to be sure. You might find they will do that as it’s protecting their interests.

    However, unfortunately I don’t think it will change the outcome. If the previous owner had a charge that takes priority even if the value goes up it will still likely be under their charge value by the sounds of it?.

    What I would point out is that newco are only caretakers at this point, the assets are not sold to them until all the valuations are in and it’s agreed. You might still have a bit of time on this but recovering fair value sounds like a challenge.

    I hope you are not to much out of pocket, take care
     
    Posted: Apr 28, 2020 By: Porky Member since: Dec 27, 2019
    #5