How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Senior Partner Your Own Question

Senior Partner
Senior Partner, Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 13255
Experience:  30 years in commercial law
18726264
Type Your UK Bankruptcy Law Question Here...
Senior Partner is online now
A new question is answered every 9 seconds

My mother has preferential shares in my sisters ltd business,

Resolved Question:

My mother has preferential shares in my sisters ltd business, which is now in CVA. I am registered POA for my mother. I have requested statement of my mothers shares with no reply.

The business is now trading under a different name but shares not transferred.
The cva administrator is intending to wind the business up. I would like to prevent this happening. I believe the business has stripped the assets from the old business into their new business. Therefore I want to prevent this liquidation on the grounds of it being a deliberate and fraudulent ploy the remove my mother as a creditor.

Can I prevent the liquidation? How could I challenge the liquidation, what grounds are needed for such a challenge? I am still within 21 days of receiving the report for this compulsory liquidation.
Submitted: 1 year ago.
Category: UK Bankruptcy Law
Expert:  Senior Partner replied 1 year ago.
Hi is your mother a creditor or simply a shareholder?

has the administrator petitioned to wind it up if so on what grounds - presumably Insolvency?

If there is a CVA there must have been an agreement with creditors who will have had some oversight on what the business was sold for assuming is ha been sold. Presumably the business is now being carried on by a new company?
Customer: replied 1 year ago.

Mothers investment is held as preferential shares, no voting rights.


 


Yes CVA supervisor petitioned to wind up and liquidate, to be heard mid Dec, reason was failure to pay as per CVA agreement for back tax, plus current tax and none submission of accounts. Not sure on insolvency, no accounts submitted since May 2010. All trade now appears to be through new business name.


 


CVA was agreement with creditors, this was just tax office. Business not sold. But new business is in the same premises, same trade, same directors, same phone numbers etc.. The new business is a replica of old business, just a new name.

Expert:  Senior Partner replied 1 year ago.
Ok thanks. Clearly the company is insolvent. Unfortunately if your mother is a shareholder then the chances are that she has lost all her money . even preference shareholders rank behind the creditors and the revenue have priority over the ordinary creditors.

It is not unusual for the directors to start a Phoenix Company but if the company goes into compulsory liquidation the liquidator who will be wholly independent is obliged to report in the conduct of the directors and I frankly doubt if in the circumstances you describe the directors will have been able to buy assets at below market value.

Certainly you can appear at the winding up but if HMRC is one of the creditors there is no chance you will be able to prevent the liquidation unless you plan to invest enough money to pay the creditors which I would expect is not the case

I am sorry to give you such bad news but there it is.
Customer: replied 1 year ago.

Surely the directors can not continue exactly as before, same staff, same offices, same everything after transferring all assets of first company into second company?


Surely they can not use the bankruptcy of first company to deliberately get rid of a £300,000 plus shareholder?

Expert:  Senior Partner replied 1 year ago.
No they cannot transfer the business to defeat the rights of a shareholder. However if the compnay has gine broke they can try and rescue the businees. But if the company is insolvent the shareholder has already lost their money. I am afraid it happens all the time. Whether the phoenix business has been legitimately set up can be investigated and probably will be by the liquidator. A shareholder has no right over the underlying assets however. It is too late now but if your mother out up £300k to fund the business she would have been better advised to advance it as a secured loan not ad preference shares .

Senior Partner, Solicitor
Satisfied Customers: 13255
Experience: 30 years in commercial law
Senior Partner and 4 other UK Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick Leeds, UK
< Last | Next >
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick Leeds, UK
  • I did not know a French Law service existed and I was very impressed with the speed of reply --- very professional. Many thanks! Ms. Baker Alfafar, Spain
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie USA
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
 
 
 

Meet The Experts:

 
 
 
  • Max Lowry

    Advocate

    Satisfied Customers:

    61
    LLB, 10 years post qualification experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    61
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    59
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/AJ/ajlaj01/2012-5-9_14051_Profile1.64x64.jpg Alex J.'s Avatar

    Alex J.

    Solicitor

    Satisfied Customers:

    57
    2 Years Insolvency Litigation
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    19
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/Topadvisor/2010-5-18_221239_Me.jpg John Knox's Avatar

    John Knox

    Solicitor

    Satisfied Customers:

    12
    solicitor with 8 years experience
  • http://ww2.justanswer.com/uploads/TO/touchwoodsden/2013-12-6_91518_MeforJA.64x64.jpg Stuart J's Avatar

    Stuart J

    Solicitor

    Satisfied Customers:

    55
    PGD Law. 20 years legal profession, 6 as partner in High Street practice