Walking the walk with Spongebob

Discussion in 'Insolvency' started by Andy Hunt, Jun 16, 2020.

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  1. Mark T Jones

    Mark T Jones UKBF Legend

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    It always makes me smile when these people come looking to borrow money as shadow directors, expecting to be treated like decent paying customers.
     
    Posted: Jul 13, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #61
  2. Ray Newman

    Ray Newman UKBF Regular

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    I hadn't realised it was a sticky thread, TBH. Until recently, this was one of the less active sub-forums and hadn't particularly come to my attention until now.
     
    Posted: Jul 13, 2020 By: Ray Newman Member since: Dec 13, 2018
    #62
  3. UK Contractor Accountant

    UK Contractor Accountant Verified Business ✔️

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    i think it is going to get a lot activity when the furlough scheme comes to an end!
     
    Posted: Jul 13, 2020 By: UK Contractor Accountant Member since: Sep 18, 2013
    #63
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  4. Red Wood

    Red Wood UKBF Enthusiast

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    I like this.

    Unfortunately, in our line of work 'subject to creditworthiness' if we don't offer credit a competitor will.
     
    Posted: Jul 13, 2020 By: Red Wood Member since: Jan 14, 2014
    #64
  5. simon field

    simon field Verified Business ✔️

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    That’s all great. And then they can pay their debts off at a later date when they have some money?
     
    Posted: Jul 13, 2020 By: simon field Member since: Feb 4, 2011
    #65
  6. Mr D

    Mr D UKBF Legend

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    So you work to minimise the risks in the credit offered?
     
    Posted: Jul 13, 2020 By: Mr D Member since: Feb 12, 2017
    #66
  7. Red Wood

    Red Wood UKBF Enthusiast

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    We don't make stupid credit decisions, but we certainly factor in other competitors' willingness to award it to customers.
     
    Posted: Jul 13, 2020 By: Red Wood Member since: Jan 14, 2014
    #67
  8. JEREMY HAWKE

    JEREMY HAWKE Verified Business ✔️
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    I would say bin the sticky and try and get this forum detached from it as far as possible

    I have some support for the plan in the same way that St Andrews Church here in Cullompton has my support for its food Bank
    The plan is good for the right people but 90 per cent of them are using it to dispose of their responsibility.

    I have for sometime question Bob's motives for all the effort he has put into the plan
    Mark highlighting the old post may answer my question
     
    Posted: Jul 13, 2020 By: JEREMY HAWKE Member since: Mar 4, 2008
    #68
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  9. Adam93

    Adam93 UKBF Enthusiast

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    I agree. I suppose the motive for the forum is traffic (at any cost to the taxpayer).
     
    Posted: Jul 13, 2020 By: Adam93 Member since: Jan 18, 2018
    #69
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  10. Spongebob

    Spongebob UKBF Legend

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    The Spongebob Plan emerged from my own experiences of dealing with two insolvent companies almost simultaneously. At that time (mid noughties) it was standard procedure for HMRC to wind up companies which owed tax leading to compulsory liquidation. The Spongebob Plan was predicated on the premise that allowing the OR to liquidate the company was a valid option where there were insufficient funds to appoint an Insolvency Practitioner. The invitation to creditors to initiate winding up proceedings is still integral to the plan.

    The suggestion that any company assets be moved to a place of safe keeping is expressly to protect those assets in the interests of the creditors as a whole, rather than allow them to be cherry-picked by the first creditor who sends in a bailiff. Typically, this will be the landlord.

    It has become increasingly rare since then for HMRC (or any other creditor) to wind companies up. It is more common these days for the company to sit in limbo for months before finally being dissolved (struck off) by Companies House. It is almost certain that by then any physical assets will have been picked clean by bailiffs acting on behalf of one creditor, to the detriment of all the others. Hence the perfectly lawful suggestion that they be moved to a place of safe keeping.

    If the company is dissolved without entering a formal insolvency process the assets should either be divided pro-rata between the creditors or offered up to the Treasury Solicitor. That is my advice.

    I am enough of a realist to know however, that this is almost never going to happen.

    In the kind of insolvencies we're talking about the value of the physical assets will be minimal - typically some office equipment, a bit of stock, and maybe a few tools. In the great scheme of things who really cares?
     
    Last edited: Jul 14, 2020
    Posted: Jul 14, 2020 By: Spongebob Member since: Dec 9, 2008
    #70
  11. UK Contractor Accountant

    UK Contractor Accountant Verified Business ✔️

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    Y
    well that is not what your sticky (non sticky) says is it? Correct me if it wrong but it says hold the assets until the Treasury Solicitor comes looking for them!
     
    Posted: Jul 14, 2020 By: UK Contractor Accountant Member since: Sep 18, 2013
    #71
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  12. Mr D

    Mr D UKBF Legend

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    And the crown solicitor can disclaim the assets. Leaving the person who asked in control of them.
     
    Posted: Jul 14, 2020 By: Mr D Member since: Feb 12, 2017
    #72
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  13. UK Contractor Accountant

    UK Contractor Accountant Verified Business ✔️

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    to sell for the benefit of creditors which is what a liquidator would do if appointed. The legal duty of the Director is to deal with the assets before letting the company be dissolved by c/house.
     
    Posted: Jul 14, 2020 By: UK Contractor Accountant Member since: Sep 18, 2013
    #73
  14. Mr D

    Mr D UKBF Legend

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    Sell for the benefit of the creditors of the dissolved company? And what exactly do you say happens to debt of a dissolved company?
    Do not forget the director is getting nothing. No longer a director and goods not given to company.

    So what you appear to want is the person who gets the goods should sell them to someone for the purpose of handing over money to businesses that person does not owe?
     
    Posted: Jul 14, 2020 By: Mr D Member since: Feb 12, 2017
    #74
  15. Andy Hunt

    Andy Hunt UKBF Newcomer

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    Is there a reason why the Spongebob plan says to wait a few months from writing to creditors before submitting form DS01?
     
    Posted: Jul 21, 2020 By: Andy Hunt Member since: Jun 16, 2020
    #75
  16. Scalloway

    Scalloway UKBF Legend

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    The DS01 can only be submitted three months after the company ceases trading.
     
    Posted: Jul 21, 2020 By: Scalloway Member since: Jun 6, 2010
    #76
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  17. Andy Hunt

    Andy Hunt UKBF Newcomer

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    I’ve started the spungebob plan and the only creditors are HMRC (Corp tax and vat) and the landlord of the property.

    I have discussed with the landlord the possibility of me paying off the rent out of my own pocket for a 50% discount until the end of the lease.

    would this be seen as preferential treatment ?
     
    Posted: Aug 8, 2020 By: Andy Hunt Member since: Jun 16, 2020
    #77
  18. Mr D

    Mr D UKBF Legend

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    Treating one creditor different than the other? Paying one not the other?
    Yes.
     
    Posted: Aug 8, 2020 By: Mr D Member since: Feb 12, 2017
    #78
  19. Chris Ashdown

    Chris Ashdown UKBF Legend

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    Why would you do this, it's the company who owns the debt not you,

    If you gave a personal guarantee for the lease then the pg is a different item, and you could come to a separate agreement over that, but its possible the landlord would find a new tenant a month or two down the line, so you would need a contract to only pay off your PG until someone else takes over the building on a new lease weather that's at 50% or full rate thats for agreement

    If he was to take you to court over a PG then the payments awarded by the court would take into consideration your financial situation and be at a small repayment rate

    Worth talking to a solicitor or Citizens advice before you do anything else

    In my case I had a pg with the bank, sold my 7 year car and offered them that money as a full and final settlement a quite small percentage amount to what was owed, they agreed, knowing bankruptcy was my other option and they would get a few quid a year instead of the lump sum
     
    Posted: Aug 8, 2020 By: Chris Ashdown Member since: Dec 7, 2003
    #79
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  20. Lisa Thomas

    Lisa Thomas UKBF Legend

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    Not where payment is coming from your own funds, but beware you might be inadvertently giving a personal guarantee (if one isn't already included with the lease) and should tread carefully.
     
    Posted: Aug 10, 2020 By: Lisa Thomas Member since: Apr 20, 2015
    #80
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