replied 3 years ago.
I have appointed a practitioner to liquidate a company which I was a director for.
The agreement was the company has to insure a payment of £5000.00 +VAT which was 17.5% so the total was £5750.00.
I have made two payments on behalf of the company, 1st payment was into the IP’s bank account and the second payment was made in cash at the creditors meeting.
After about 6 months I contacted the IP asking about the case, the IP asked for a further £2000.00 I asked him why the IP said: “there was assets in the company and in order that I do not mention them I need a further £2000.00” I answered that the assets were sold and the money was paid to you so the IP refused mu answer furthermore I asked to send me a written note to confirm that so he did stating that he accepts £2000.00 and I will be cleared from any responsibility.
I refused to pay the sum of £2000.00 stating that it was bullying, I informed the IP as well that I will make a complaint against him.
I contacted his official body launching a complaint against the IP.
***TWO THINGS HAPPENED since.
*1- the Senior Investigations Officer has concluded that “I have now concluded the investigation and after reviewing the evidence I have decided that the case should be closed. The reasons for this decision are set out in the attached file note”. Although I think the Officer was not right about the decision for several reasons. I have included the note at the end of my text.
*2- the IP decided to call another creditors meeting
****why do you think the IP has called another creditors meeting?
****what is the worst possible outcome?
****what is the appeal detailed grounds for review, setting out which aspects of the decision I disagree with and why?
This is the full note
This note sets out the decision following investigation of the complaint.
On 06 January 2011, X ("Company") entered creditors' voluntary liquidation and Mr IP was appointed as liquidator.
Mr director is the director of the Company.
The complaint in this matter is as follows:
Mr IP has been "exercising bullying and harassment and intimidation" in relation to a demand for payment, in the sum of £2,000, from Mr Director in relation to the sale of certain of the Company's assets prior to liquidation.
Outcome of investigation Complaint (i)
Mr IP has been "exercising bullying and intimidation and blackmailing" in relation to a demand for payment, in the sum of £2,000, from Mr Director in relation to the sale of certain of the Company's assets prior to liquidation
In his email of complaint to THE OFFICER, dated 25 March 2012, Mr Director stated that "The IP
(Mr IP) is exercising bullying and intimidation and blackmailing."
Mr Director stated that Mr IP's initial fees, as liquidator of the Company, were "paid in two payments; the last payment was made at the creditors meeting."
Mr Director also referred to a telephone call he held with Mr IP approximately eight months after the Company entered liquidation during which he requested an update as to the progress of the liquidation.
Mr Director stated that during this telephone call, Mr IP requested payment of a further sum of £2,000. It appears this sum related to proceeds from the sale of the Company's assets, prior to it entering liquidation.
In a telephone call with THE OFFICER, dated 29 August 2012, Mr Director elaborated that he was a director of a chauffeur car company and in approximately July/August 2010 he sold the majority of the Company's motor vehicles so that an outstanding petrol account could be settled to ensure the remaining motor vehicles could continue to operate. Mr Director added that the outstanding petrol account was in the sum of approximately £11,000. Mr director confirmed that the sale proceeds were paid directly into his personal bank account and not the Company bank account.
Mr Director stated he informed Mr IP sometime in October/November 2010 that the majority of the Company's motor vehicles had been sold.
Mr Director also stated Mr IP informed him that his fee for accepting the appointment as liquidator of the Company would be in the sum of £5,000 plus VAT and that he required the monies to be paid on account.
Mr Director informed THE OFFICER that Mr IP's fee of £5,000 plus VAT was paid using the sale proceeds of the motor vehicles, held in his personal bank account. Mr Director added that the sum of £3,750 was transferred directly from his bank account to that of Mr IP and the remaining amount was paid in person sometime later when Mr Director attended Mr IP's office.
Mr Director stated that following his appointment as liquidator of the Company, Mr IP demanded repayment of the sum of £2,000 from the sale of the motor vehicles. Mr Abu Lebdeh added that Mr IP raised the possibility of recalling the sold motor vehicles if the monies were not paid.
Mr Director stated that he informed Mr IP he was unable to pay the sum of £2,000 from the sale proceeds of the motor vehicles as these monies had been used to pay Mr IP's initial fees.
Later on 29 August 2012, Mr Director provided THE OFFICER with a copy chain of correspondence he had with Mr IP during December 2011 and January 2012. It included a letter from Mr IP to Mr Director, dated 06 January 2012 stating that a sum of
£2,000 would be accepted "in full and final settlement of all potential actions against" Mr
Director in relation to the sale of the Company motor vehicles. The correspondence also included a copy receipt evidencing that the sum of £2,375, in cash, had been received by Mr IP in relation to the liquidation.
In a telephone call with THE OFFICER held on 14 August 2012, Mr IP informed THE OFFICER that he was pursuing the proceeds from the sale of the Company's motor vehicles prior to his appointment as liquidator.
The Statement of Affairs for the Company, dated 06 January 2011, stated that the Company had no assets available to creditors.
In his report to creditors, dated 19 April 2012, Mr IP stated that the Company had no assets at the date of the liquidation but that the liquidation was continuing with regards to a number of antecedent transactions relating to the sale of the Company's motor vehicles prior to liquidation.
In the report, Mr IP disclosed further details of the sale of the Company's assets, pursuant to the provisions of Statement of Insolvency Practice ("SIP") 13 (2012).
Mr IP reported to the Company's creditors that at the initial creditors' meeting it was established that at sometime during August- October 2010, five motor vehicles were sold to connected parties, namely, Mr ?, Mr ? and Mr ??? for a sum of circa £5,000. Mr IP confirmed that the purchasers were "Company's Director and relatives". Mr IP added "To date, I have been unable to determine receipt of the consideration for the said transaction(s) and as such, it remains outstanding. I am continuing to purse [sic] the matter."
With regards to his fees, Mr IP stated "Authority was given at the meeting of creditors held on 06 January 2011 for the liquidator to draw a Statement of Affairs fee and a fee for the cost of convening the first meetings of members and creditors of £4,250 and £750 respectively and for liquidator's fees to be drawn on a time cost basis. To date, a Statement of Affairs fee of £5,000.00 has been drawn on account from third party funds received. No liquidator's fees have been drawn."
As liquidator of the Company, the primary duty of Mr IP is to get in, realise and distribute the Company's assets for the benefit of the Company's creditors and in carrying out this duty, he has a wide range of powers, as specified by section 166 and Schedule 4 of the Insolvency Act 1986.
In order to establish the true position of a company's assets, a liquidator has a duty to investigate what assets can be realised and what other recoveries can be made in accordance with SIP 2 (2012).
On the information provided, it is decided that this complaint is closed as there is no case to answer. As liquidator of the Company, Mr IP has a wide range of powers to pursue his main aim of getting in, realising and distributing the Company's assets for the benefit of the
creditors. Part of that process includes conducting the necessary investigations and taking steps to claim the proceeds from the sale of the Company's motor vehicles. In addition, from the copy correspondence provided, Mr IP does not appear to have exercised "bullying and intimidation and blackmailing".
Although Mr Director states that he banked the sale proceeds into his own personal bank account and used these monies to pay Mr IP's initial fees in the liquidation, there is no evidence that Mr IP was aware of the source of these monies. Mr IP received his fees in the liquidation via bank transfer from Mr Director's personal bank account and in cash. As liquidator of the Company, Mr IP is entitled and duty bound to pursue repayment of the sale proceeds for the benefit of the Company's creditors.