Liquidator goes into administration while still holding my funds

[BarbaraW]

Ouch. FWIW the first ~2/3 of your post all sounds very standard, no concerns there.

Re the last bit, not something I've had any direct experience of, but:
- client funds should be held separately from the liquidator firm's business funds (ie "your" money and "their" money should not be mixed).
- every liquidator should have an "alternate", basically another licensed insolvency practitioner who will take over any cases if the main liquidator becomes incapacitated in some way.
- every solvent liquidation should have bonding in place, which protects your company's assets against any possible malpractice by the liquidator.
You haven't named the firm/liquidator (no need for you to do so), so impossible for us to guess exactly what might have happened...but even if there was fraud in play and the liquidator has essentially stolen your money, you shouldn't lose out, the bonding should cover it and new liquidator deal with it. Be warned it may take a while to sort out though.

It sounds like you're aware who the administrator is? They should be who you contact. Try to remain calm and just ask for what you should expect and when, providing them with any information they ask for as inevitably they'll be trying to figure out what's happened, may not have ready access to historical documents re your case etc.

hello,

Do you know how long insurance company has to pay out the money? I am "the lucky one" and there was a bond on my money but I am still waiting, and it's been over a year! I managed to establish that the bond is with Marsh. I asked Quantuma (new liquidator), but they responded that they have no update regarding my claim.

Thank you!

[pkm]

Horrible situation to be in. I hope it is not a big pot of money. I remember my liquidation 10+ years ago - it was done smoothly by Marshall Peters but I had many sleepless nights as I had a sizeable pot which had to be transferred to another account. I remember doing a lot of checks including their year end returns to make sure they are credible. One of the questions I asked them was about the holding account. They said - "
The holding account which the client will forward the funds to is held with XXX Bank and the liquidation accounts which we open upon liquidation of the company are held with the YYY." So, there are two types of accounts involved it seems. It depends what stage yours was in.

In any case the money can hopefully be clawed back from administrators i.e. Quantuma if your money was not ring fenced properly. https://www.consultancy.uk/news/2949...-restructuring

It might also be worth contacting other insolvency companies to ask what happens to your business money if they go bankrupt. Here's Marshall Peters's site if you want to ask them - https://www.marshallpeters.co.uk.

[pkm]

I forgot to add that MP (my liquidator 10+ years ago) said that my money was protected by insurance certificate - "With any insolvency case that we deal with your funds are protected by both our company insurance (certificate attached) and an additional insurance specific to each individual case which forms part of the disbursements."

So - I don't think your money is lost. The insurance should cover it but your port of call should be Quantuma the administrator IMO.

[Snooky]

This is shocking. As someone who plans to liquidate their company via MVL very soon, I'm very glad I saw this post because I'd probably have also trusted the insolvency practitioner a little too much. Whoever I select now will first need to satisfy me that I'm protected from any chance of the company's money vanishing.

I hope this works out well for all the OP and those who are in the same boat.

[jamesbrown]

This is shocking. As someone who plans to liquidate their company via MVL very soon, I'm very glad I saw this post because I'd probably have also trusted the insolvency practitioner a little too much. Whoever I select now will first need to satisfy me that I'm protected from any chance of the company's money vanishing.

I hope this works out well for all the OP and those who are in the same boat.

The main thing to check is that they are bonded. That way, if the liquidator goes tits up or even engages in malpractice, your funds will be safe.

[Maslins]

This is shocking. As someone who plans to liquidate their company via MVL very soon, I'm very glad I saw this post because I'd probably have also trusted the insolvency practitioner a little too much. Whoever I select now will first need to satisfy me that I'm protected from any chance of the company's money vanishing.

I hope this works out well for all the OP and those who are in the same boat.

Assuming no intention of fraud by the insolvency practitioner, they don't even want to hold huge sums of your company's cash. It doesn't benefit them. It's just a risk, and a concern, that somehow something could go wrong (get hacked, dodgy employee manages to get access, bank goes bust etc etc).

Quite a few providers now do away with this risk completely, for the benefit of both client and liquidator, by getting you to withdraw all funds in advance. In the short term, it's a loan, then dealt with via in specie distributions. HMRC make clear they're satisfied it'll still be deemed a capital distribution (see here). Doesn't seem a good a reason NOT to do it that way. It does create some extra risk for the liquidator, as if you tell them there's no creditors, you take out every penny, then a creditor you forgot about pipes up, the liquidator's on the hook to pay it. Of course the liquidator has powers to go after you personally, but it's still a pain, especially if the client doesn't voluntarily play ball.

Anyway, sorry this doesn't help those with the problem initially highlighted in this thread. As people have mentioned, you should be covered, your funds should be isolated and protected...but it may well take a while to sort out.