Toggle sidebar

Walking the walk with Spongebob

Sort by date Sort by votes
Ian J said:
Quite right. Many people were taught that it is acceptable to steal money that doesn't belong to them which is in effect what Spongebob is alluding to without actually coming out and saying so
Click to expand...
I actually found Spongebob post quite refreshing. So many times I've read how the plan is to help poor desperate directors who have nowhere else to turn, and now he's finally admitting it's a mechanism to steal money (OK, technically hide it and hope nobody notices).
 
Upvote 0
Mr D said:
And is there another method that is currently available that does not shaft others along the way useable by those companies with no assets and no money?
Click to expand...

Yes. It’s called paying for what you’ve had, even if it means small instalments. Don’t like it?
 
Upvote 0
The option is to pay for a IP and have them take all the money and leave nothing for the creditors

You would think the whole Insolvency Practitioner system could do with a serious review and limit the amounts the IP's can take from the sell of assets etc and clear out the cowboys

They could also have a registered list of approved auction houses where they sell assets on a specialised auction advertised online, rather than just selling on general auctions with little advertising

So review the whole insolvency practice for the benefit of the creditors rather than the greed of some IP's and users of the spongebob plan, and pre pack
 
  • Like
Reactions: bodgitt&scarperLTD and gpietersz
Upvote 0
Chris Ashdown said:
The option is to pay for a IP and have them take all the money and leave nothing for the creditors
Click to expand...
The other option is to raise the cash to pay the debts by using your house as security for a bank overdraft. As a sole trader that is what one does. Its like a kick up the backside to get some money coming in.
 
Upvote 0
Ian J said:
I wonder if the mods have actually read the sticky as I have just read it for the first time and found the contents quite disturbing.
Click to expand...

I agree. Its fine to avoid an insolvency practitioners fees, but taking money out is dishonest. Specifically the suggestions 1) to avoid repaying directors loans and dividends that should not have been paid and 2) taking money out instead of using it to repay creditors are unethical and illegal. Both are hard to prove, too expensive to pursue so people get away with it, but that does not justify it.
 
  • Like
Reactions: Deleted member 59730 and simon field
Upvote 0
simon field said:
Yes. It’s called paying for what you’ve had, even if it means small instalments. Don’t like it?
Click to expand...

Paying from what?
Company has no money.

So your idea is to tell business owners of an alternative to spongebob plan that involves the company with no money paying money in instalments while of course being unable to trade.
A daft idea.
 
Upvote 0
atmosbob said:
The other option is to raise the cash to pay the debts by using your house as security for a bank overdraft. As a sole trader that is what one does. Its like a kick up the backside to get some money coming in.
Click to expand...

However its not a requirement for company directors. They don't owe the money.
 
Upvote 0
Chris Ashdown said:
The option is to pay for a IP and have them take all the money and leave nothing for the creditors

You would think the whole Insolvency Practitioner system could do with a serious review and limit the amounts the IP's can take from the sell of assets etc and clear out the cowboys

They could also have a registered list of approved auction houses where they sell assets on a specialised auction advertised online, rather than just selling on general auctions with little advertising

So review the whole insolvency practice for the benefit of the creditors rather than the greed of some IP's and users of the spongebob plan, and pre pack
Click to expand...

Ah I see. You want to limit other businesses being able to buy goods cheaply in order to sell for a profit.
Instead you want them to bid up the price higher to make less profit or even stop buying goods that way at all as unaffordable.
 
Upvote 0
Bobs plan is the main google suggestion on the internet when googling this site

This site is here to help businesses to start up and keep them going thrive and to do well but its digital presence is overwhelmed by the Spongebob plan

Do we really want to see this as it makes the site a losers' charter !
Sorry to say but Bob does not even pay for a full membership it just takes business away from the IPs on this site that pay to be full members

Ironically though this case is illegible for the Spongbob plan
Morally maybe not
 
Upvote 0
Mr D said:
Ah I see. You want to limit other businesses being able to buy goods cheaply in order to sell for a profit.
Instead you want them to bid up the price higher to make less profit or even stop buying goods that way at all as unaffordable.
Click to expand...

That's not what i implied, when we went bust the goods we had went to a general auction in the village of acle, by that most people attending would be the general public and bidding would no doubt be low value, but the IP had followed the law and gotten the best market price.

It would be far better to have regional auction sites just for insolvency sales where they are published far better and no doubt would get a far wider audience and also interest in equipment etc by other businesses meaning more money to pay creditors if you also take my other comments into consideration

So I cannot understand your concern or logic, maybe you could explain
 
Last edited:
Upvote 0
Chris Ashdown said:
That's not what i implied, when we went bust the goods we had went to a general auction in the village of acle, by that most people attending would be the general public and bidding would no doubt be low value, but the IP had followed the law and gotten the best market price.

It would be far better to have regional auction sites just for insolvency sales where they are published far better and no doubt would get a far wider audience and also interest in equipment etc by other businesses meaning more money to pay creditors if you also take my other comments into consideration

So I cannot understand your concern or logic, maybe you could explain
Click to expand...

As I said you want those who currently would go for the assets to pay higher price.
Meaning less profit from anyone buying the goods. And the IP spending a lot more money to sell the assets - regional so further to take goods, more widely publicised so higher advertising costs.

You just cannot stand the thought of people making money from buying and selling. Strange on a business forum.
 
Upvote 0
Mr D said:
As I said you want those who currently would go for the assets to pay higher price.
Meaning less profit from anyone buying the goods. And the IP spending a lot more money to sell the assets - regional so further to take goods, more widely publicised so higher advertising costs.

You just cannot stand the thought of people making money from buying and selling. Strange on a business forum.
Click to expand...

Your insight to the problem is enlightening
 
Upvote 0
atmosbob said:
The other option is to raise the cash to pay the debts by using your house as security for a bank overdraft. As a sole trader that is what one does. Its like a kick up the backside to get some money coming in.
Click to expand...

But that defeats the entire purpose of a ltd co. To protect the directors or owners assets from risk. Thus encouraging risk and enterprise. Of course some will go wrong, happens with sole traders too. And some will screw the system, but overall the mechanism works, and I bet the gains far outweigh the losses to the treasury, otherwise they would get rid of the system entirely.
Perhaps you would like to bring back debtors prisons too?

Those with amoral,or criminal bents will screw whatever system is in place regardless, so why punish and try and shame those whose business has failed, regardless of whether it's outside circumstances or bad decisions. Most will pick themselves up and try again, contributing to jobs and the economy.
 
Upvote 0
ville1401 said:
But that defeats the entire purpose of a ltd co. To protect the directors or owners assets from risk. Thus encouraging risk and enterprise. Of course some will go wrong, happens with sole traders too. And some will screw the system, but overall the mechanism works, and I bet the gains far outweigh the losses to the treasury, otherwise they would get rid of the system entirely.
Click to expand...

Many decades ago when I was involved in credit management I would often set a credit limit of exactly the same as the company's share capital on new and fairly new companies. People used to complain that a credit limit of £2 was of no use to them and weren't too happy when I said that i was only willing to risk as much money as they had at risk in their company
 
  • Like
Reactions: simon field, Chris Ashdown, Deleted member 59730 and 1 other person
Upvote 0
JEREMY HAWKE said:
Bobs plan is the main google suggestion on the internet when googling this site

This site is here to help businesses to start up and keep them going thrive and to do well but its digital presence is overwhelmed by the Spongebob plan

Do we really want to see this as it makes the site a losers' charter !
Sorry to say but Bob does not even pay for a full membership it just takes business away from the IPs on this site that pay to be full members

Ironically though this case is illegible for the Spongbob plan
Morally maybe not
Click to expand...

Spongebob showed his true colours on here a few years back, when he told - quote - 'my favourite bankruptcy story' which involved someone who had systematically set out to shaft multiple suppliers in order to get the tools of his trade for free.
 
Upvote 0
Ian J said:
Many decades ago when I was involved in credit management I would often set a credit limit of exactly the same as the company's share capital on new and fairly new companies. People used to complain that a credit limit of £2 was of no use to them and weren't too happy when I said that i was only willing to risk as much money as they had at risk in their company
Click to expand...

It always makes me smile when these people come looking to borrow money as shadow directors, expecting to be treated like decent paying customers.
 
Upvote 0
Ian J said:
People used to complain that a credit limit of £2 was of no use to them and weren't too happy when I said that i was only willing to risk as much money as they had at risk in their company
Click to expand...

I like this.

Unfortunately, in our line of work 'subject to creditworthiness' if we don't offer credit a competitor will.
 
Upvote 0
ville1401 said:
But that defeats the entire purpose of a ltd co. To protect the directors or owners assets from risk. Thus encouraging risk and enterprise. Of course some will go wrong, happens with sole traders too. And some will screw the system, but overall the mechanism works, and I bet the gains far outweigh the losses to the treasury, otherwise they would get rid of the system entirely.
Perhaps you would like to bring back debtors prisons too?

Those with amoral,or criminal bents will screw whatever system is in place regardless, so why punish and try and shame those whose business has failed, regardless of whether it's outside circumstances or bad decisions. Most will pick themselves up and try again, contributing to jobs and the economy.
Click to expand...

That’s all great. And then they can pay their debts off at a later date when they have some money?
 
Upvote 0
Mark T Jones said:
Spongebob showed his true colours on here a few years back, when he told - quote - 'my favourite bankruptcy story' which involved someone who had systematically set out to shaft multiple suppliers in order to get the tools of his trade for free.
Click to expand...

Ray Newman said:
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.
Click to expand...

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
 
  • Like
Reactions: Lisa Thomas
Upvote 0
JEREMY HAWKE said:
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
Click to expand...

I agree. I suppose the motive for the forum is traffic (at any cost to the taxpayer).
 
  • Like
Reactions: Lisa Thomas
Upvote 0
Ian J said:
I wonder if the mods have actually read the sticky as I have just read it for the first time and found the contents quite disturbing.

Whilst there are no direct instructions to do the wrong thing it is hinted at several times with allusions of how to rip off HMRC and other creditors whilst lining one's own pockets and I'm not sure that it's the sort of thing that an honourable forum should be actively promoting.

By all means have a thread devoted to how the "Spongebob Plan" works but leave out the suggestions of hiding the assets
Click to expand...

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:
Upvote 0
Y
Spongebob said:
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.
Click to expand...
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!
 
  • Like
Reactions: Lisa Thomas
Upvote 0
Spongebob said:
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?
Click to expand...

And the crown solicitor can disclaim the assets. Leaving the person who asked in control of them.
 
  • Like
Reactions: Lisa Thomas
Upvote 0
UK Contractor Accountant said:
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.
Click to expand...

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?
 
Upvote 0
Is there a reason why the Spongebob plan says to wait a few months from writing to creditors before submitting form DS01?
 
Upvote 0
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 ?
 
Upvote 0
Andy Hunt said:
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 ?
Click to expand...

Treating one creditor different than the other? Paying one not the other?
Yes.
 
Upvote 0
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
 
  • Like
Reactions: bodgitt&scarperLTD
Upvote 0
Andy Hunt said:
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 ?
Click to expand...

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.
 
Upvote 0
You must log in or register to reply here.

Latest Articles

Top Bottom
Back