Benemack - insolvency and bankruptcy advice

CMS WebView PLC - in Members’ Voluntary Liquidation - 06/09/07

bene2 — Thu, 06 Sep 2007 15:02:23 +0000

We are handling the solvent liquidation of this AIM listed company which we believe would make an attractive clean vehicle for a company or business wishing to gain access to the advantages of a Stock Exchange quotation. The directors of CMS WebView PLC are supportive and would Co-operate fully with a suitable candidate. For further information, please contact Ian Williams at our London office on 020 7247 1174.

Benedict Mackenzie LLP views on litigation funding

bene2 — Thu, 18 Jan 2007 09:46:05 +0000

The merits of litigation funding are presently a hot topic. Benedict Mackenzie have obtained such funding in deserving cases.

Benedict Mackenzie believe litigation funding can avoid injustice to claimants who have a strong case but do not have the means to bring the claim (a particular issue for liquidators seeking to achieve recovery for creditors). Litigation funding should not be confused with the US contingency model which has seen some notoriously frivolous claims reach court. To secure funding from a professional third party funder, a case must have a strong chance of winning. Claims without merit will not attract backing.

For specialist advice in this field please contact the partners at our London office or contact info@bmaclondon.com

What can Benedict Mackenzie do for you?

bene1 — Wed, 05 Jul 2006 10:15:21 +0000

Many businesses and individuals face times of financial difficulty. If your debts are building up and no matter what you do the situation seems to get worse, it can be difficult to know how to cope or where to turn for help.

This is when you need the help of a professional; somebody experienced and understanding who sees situations like yours every day and can advise you.

Similarly, if you are a bank, a charity or a professional adviser with a client facing severe financial difficulties, and this is outside your area of expertise, you need another professional that you can trust, someone who is not only an expert in their area but who will recognise and respect your relationship with your client.

All Benedict Mackenzie partners are happy to give a free initial consultation, usually up to one hour, so that you or your client are aware of your options and can make informed decisions based on reliable and expert advice. Your local office will be happy provide more detail.

If you own or are a director of a company, Benedict Mackenzie will help you to identify ways that it may be possible to turnaround the business.
If you are an individual, Benedict Mackenzie can help you to manage your debts and the stressful issues surrounding them.
If you are an adviser, Benedict Mackenzie will treat you and your client with the highest level of confidentiality, competency and professionalism to ensure a satisfactory outcome.

Where-ever possible we will help you or your client to recover from financial difficulties. This will usually include putting in place a business recovery strategy alongside an informal payment plan, or a more formal arrangement with creditors such as an Administration, Company (or Individual) Voluntary Arrangement. If the situation is beyond rescue, Benedict Mackenzie will advise and guide you through the alternative options of bankruptcy or liquidation. In all circumstances, we will bring our expertise to bear to improve the situation for you and the stakeholders in your business.

To take the first step towards a healthy financial future, click on your choice of office at the bottom of this page.

Benedict Mackenzie advises companies to remember business basics in the face of rising insolvency figures

bene1 — Tue, 04 Jul 2006 11:12:21 +0000

The DTI’s latest insolvency figures released today, once again make bleak reading. 3,187 companies suffered liquidation in the last quarter, an increase of 8.5% on this time last year, but business rescue specialists Benedict Mackenzie say many more insolvencies can be avoided if businesses take the time to stand back and review their operations before things get to crisis point.

The biggest increase affecting companies was in compulsory liquidations, where 15.2% more companies than last year were forced into liquidation because of unpaid bills and one or more of their creditors had petitioned the Court for their company to be wound up.

The other huge rise was in personal insolvencies which saw a massive increase of 57.1% on this period last year, the inevitable backlash of people over-spending on credit without the means to pay it off.

Graham Petersen, partner in business rescue and recovery firm Benedict Mackenzie, says “The economic climate is still causing businesses a lot of trouble but sometimes crises can be averted by business owners taking a step back from their company and ensuring they are covering business basics. The three golden rules for companies facing financial difficulties are:

to reduce costs wherever possible
to collect in the money owed to the business and
to manage the cash flow

It is the companies with weak cashflows that are particularly vulnerable when the economic climate is less than perfect.”

Graham advises, “Businesses don’t have to ‘go it alone’. If your business is under pressure then you should seek advice as soon as possible in order that you have the widest range of options available to you and are not necessarily forced into liquidation.”

Businesses that would like more advice on how to avoid insolvency should email info@benemack.com, visit their local Benedict Mackenzie office or log on at www.benemack.com

Retailers face tough trading conditions

john — Tue, 04 Jul 2006 11:11:57 +0000

Rupert Mullins of Benedict Mackenzie warns retailers that they may face a tough time this year. Already Benedict Mackenzie has seen a significant increase in the number of retailers seeking their advice due to poor Christmas sales, the same experience has been repeated at all of their offices throughout the south of England.

Despite recent statistics, that like for like sales had increased by around 3%, this was certainly not the case for all retailers, with sellers of electrical goods being hit particularly hard. This has left a number of retailers suffering from cash flow difficulties in January and without further funds they could face serious problems which will affect their ability to trade.

Rupert Mullins, partner at the Bristol office of Benedict Mackenzie, advises retailers who are facing difficulties to seek the help of their professional advisers or bankers. However without a credible plan to trade out of their current financial situation, they may find that creditors are unsympathetic.

“Some retailers may prefer independent help; in which case they should seek the help of a local insolvency practitioner sooner rather than later” says Mr Mullins. “The sooner they get help the more opportunity there is to turn their business around; if they leave it for another two or three months to see if things ’settle down’ it is likely to be too late and the business could face insolvency.”

More information on Benedict Mackenzie can be found by phoning your closest office or emailing info@benemack.com

A NASTY STING IN THE TAIL - SECTIONS 216&217 INSOLVENCY ACT 1986

john — Tue, 04 Jul 2006 11:07:38 +0000

For some years Mrs Smith was a director of a company called ABC Construction Limited. Due to trading difficulties this company was placed into creditors’ voluntary liquidation in August 1999. Unfortunately it would appear that the director was not warned by the company’s liquidator about the provisions of Section 216. In April 1999 just four months prior to the winding up she formed a new company called Off The Shelf Limited which traded as ABC Construction. That company continued to trade until March 2004 when it was also placed into creditors’ voluntary liquidation following instructions given to us by the director. It was during our pre- liquidation enquiries that we learned of the existence of the previous company and its subsequent liquidation.

Beware the Revenue & Customs!

In July 2005 HM Revenue & Customs wrote to the company’s former director and stated that, as the companies had traded under very similar names, it appeared that they were trading in contravention of Section 216. The director was therefore personally liable for the debts of the subsequent company Off The Shelf Limited by virtue of Section 217 of the same Act. The Revenue has demanded repayment of just over £87,000 from the director personally.

From our reading of the situation this is a clear case where the director, in total ignorance of the legislation, committed an offence which may ultimately cost her dearly. It could result in the director being made bankrupt.� �

It should be noted that it is up to creditors to take action under these sections of the Insolvency Act and not the liquidator. This form of action is likely to become more common as clearly HM Revenue & Customs are going to be looking in much more detail at such cases in the future. All directors should be aware that, since the government departments have lost their status as preferential creditors with effect from 15 September 2003, they are looking at all possible ways to recover unpaid taxes.

This is a very potent weapon in the Revenue’s armoury and directors of insolvent companies and their advisers must tread extremely warily before setting up a company with a similar name, or as in this case using a similar trading name.

Escape routes
There are escape clauses contained in the Insolvency Rules 1986 which state that there are three excepted cases:

Where the successor company acquires the whole or substantially the whole of the business of an insolvent company under arrangements made by an insolvency practitioner acting as its liquidator, administrator, administrative receiver or a supervisor of a voluntary arrangement under the Act.
Where the director makes an application to court for leave to use a similar name.
Where the company referred to, although known by a prohibited name, has been known by that name for the whole period of 12 months ending with the day before that on which the liquidated company went into liquidation and has not at any time during that period been dormant.

There are complicated rules as to procedure and timing in respect of all these cases and professional insolvency advice should be sort by anyone contemplating using a similar name.

The names in this case have been changed to preserve anonymity.

A LAMB’S TALE

john — Tue, 04 Jul 2006 11:02:58 +0000

Set in compact premises near the College of Law and the University of London, Lambs Bookshop had supplied countless students with their medical and legal textbooks for many years.�

The business was successful until the advent of Internet shopping. Later, the College of Law decided it would provide for all the textbook needs of its students and so halving at a stroke the bookshop⦣8364;™s turnover. The final blow came when the landlord gave six month⦣8364;™s notice of the termination of the lease of the shop.

The company became insolvent and slightly early retirement loomed for the proprietor. It seemed that the company would have to go into liquidation and its stock of books be sold for a low sum. Furthermore, the cessation of trading would have meant the loss of the statutory compensation payable on the enforced termination of the lease.

There were bank borrowings secured by a debenture and the director⦣8364;™s personal guarantee. She had resigned herself to having to find up to ¦pound;30,000 out of her lifetime⦣8364;™s savings.

Fortunately, our London office saw an opportunity to use the fast track administration procedure brought in by the Enterprise Act. We reasoned that the company could continue trading for three months by selling off the stock at half price and so collect the statutory compensation from the landlord.

So it came to pass. Trading was at a profit largely because the director worked without any pay and the bookshop stayed open until the compensation day dawned.

Despite the Administration involving trading, the administrator Ian Williams maintained a light touch with the result that our fees were kept to a minimum and the bank borrowings were substantially repaid. The director then settled her guarantee and had the debenture and the few remaining stocks assigned to her. These have been sold through the Internet with the director keeping the proceeds and so reducing further her personal loss.

Bankruptcy can change your life

john — Tue, 04 Jul 2006 11:00:48 +0000

Credit report specialist Experian has questioned whether people realise how serious the consequences are for their credit record should they declare themselves bankrupt.

According to recent figures from The Insolvency Service, there were over 15,000 bankruptcies declared in England and Wales in the first quarter of 2006, a 73 per cent year-on-year rise.

“The level of bankruptcy has increased,” said James Jones, Experian’s consumer affairs manager. “We are concerned that people don’t realise their credit report will not be wiped clean after one year.”

Mr Jones noted that despite the fact that a bankruptcy order will still appear on a person’s credit record after six years, a greater proportion of people appeared to be opting for bankruptcy above other forms of debt management, such as a consolidation loan.

By seeking professional advice from an independent financial adviser, people can find out whether a debt consolidation loan is best suited to their own individual situation and explore other alternatives to bankruptcy.

Source:
Fair Investment Company
13 May 2006

Benedict Mackenzie comments: – getting good practical advice on the full implications of bankruptcy will help those in debt to make a fully informed decision on the best options for them in their individual circumstances.

Winding-up pleas on the increase

john — Tue, 04 Jul 2006 11:00:36 +0000

The number of companies facing winding up petitions in England and Wales rose by almost 9 per cent in the first three months of the year, according to official data released yesterday. The Department for Constitutional Affairs said 3,150 companies received petitions against 2,892 for the same period in 2005.
One analyst said factors in the increase could be small business failures in a fiercely competitive high street and petitions being served on companies caught undertaking value added tax fraud, he said.

Source:
Financial Times
13 May 2006

Benedict Mackenzie comments: “the government’s easing of the bankruptcy laws was intended to help entrepreneurs and small business owners, by taking away some of the stigma of bankruptcy; the government wanted the economy to benefit by encouraging entrepreneurs to take risks and establish businesses without some of the penalties that failure incurred.

The irony is that it is these very businesses that are now suffering as unprecedented numbers of individuals take advantage of easy credit and relaxed insolvency laws. The current increases in personal insolvency are completely unsustainable and without an urgent look at current credit rules we’re looking at a recipe for disaster for our businesses.

Voluntary bankruptcies soar

john — Tue, 04 Jul 2006 11:00:23 +0000

The number of people declaring themselves bankrupt has nearly doubled during the past year, government figures showed today.
A total of 13,897 people in England and Wales applied for bankruptcy themselves, as opposed to being forced into bankruptcy by their creditors, during the first three months of 2006.

This was an 85% increase on the 7,528 people who petitioned for bankruptcy during the first quarter of 2005, according to the Department for Constitutional Affairs (DCA).
But the number of people forced into bankruptcy by their creditors rose only slightly during the year, increasing by 16% to 5,615.

Source:
Guardian
12 May 2006

Benedict Mackenzie comments: Bankruptcy is not the only option for people with debt problems. It is important for an individual to find out all courses of action open to them from a professional adviser before going down one particular route – especially one that carries the severe consequences of bankruptcy.