Reply to: Liquidator goes into administration while still holding my funds

[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.

[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.

[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.

[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.

[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.

[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!

[MangoIcecream]

This is such a horrible situation... and yes that is the same person.
BarbaraW, do you have some news from Barclays?

I've been told there was no bond on may fund, it was not in a client account and the insurance is void because there was fraud.

[northernladuk]

Ouch. There’s 160 active cases in the same position.

https://www.pro-manchester.co.uk/new...uring-limited/

I wonder where the little scrote will turn up? Australia perhaps? https://insolvencynewsonline.com.au/...-decent-drink/

I hope it's totally different in this case but once the adminstrators get in money disappears like it's water. The amounts the administrators are taking from the Lendy/Savings Stream debarcle is eye watering.

[cojak]

Ouch. There’s 160 active cases in the same position.

https://www.pro-manchester.co.uk/new...uring-limited/

I wonder where the little scrote will turn up? Australia perhaps? https://insolvencynewsonline.com.au/...-decent-drink/

[BarbaraW]

I'm still waiting for information from the new IP who was appointed to take over.
I was told he stole clients money and run away from the country.
what is shocking to me:
* ICAEW knew he is dodgy for years (in the response to his appeal they says he demonstrated lack of competence for many years), yet they just recently removed his licence
* how the bank could allow him to transfer out all the money somewhere?? to one account? was that not suspicious?

I will be calling Barclays tomorrow where he held the funds and will be raising a fraud case.

IPs are regulated and I would have never thought that someone can just steal the money!

[ContractorBanking]

That's awful, hope you manage to get all your money back. Looks like it could be a drawn out affair.

Got me thinking, is there any way for you to check that your funds are actually held in their Client Money Account?

If they have, then I guess you've got the protection.

[BarbaraW]

Hello,

I have similar situation and I believe it might be even the same practicioner. I will name and shame: Adrian Duncan, company Savants.
I've been trying to close my LTD since February 2020. Absolute nightmare, they were not responding to emails, not taking the calls and emloyees had clearly no idea what they are doing. Most likely one person with a licence hired inexperienced and unqualified people.

Today I found out that Adrian lost the licence:

"Following hearings between 9 November 2020 and 18 January 2021 the ICAEW Review Committee made the decision to withdraw Mr Duncan’s licence as a result of persistent failures of competence, failures to abide by conditions set, failure to co-operate with the ICAEW and breaches of regulations, leading to concerns that the regulatory objectives set out in s.391 of the Insolvency Act 1986 would be undermined and resulting in a risk to the public.

Mr Duncan submitted an appeal and a panel of the ICAEW’s Appeal Committee met on 7 September 2021 which made the decision to dismiss Mr Duncan’s appeal. The Appeal Panel also ordered the appellant to pay Respondent’s costs summarily assessed in the sum of £17,500. Accordingly, Mr Duncan’s license has been removed."

I have no idea who took over from them, lines are not working, noone is responding to emails and I have no idea what to do.
I checked my invoice and there is no insurance, I was not aware I can have one, I thought that since liquidators need a special licence that my money is safe.

Any advice will be greatly appreciated.
Thank you,
Barbara

[MangoIcecream]

Thanks a lot, I did PM you some more details.

[Maslins]

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.

[northernladuk]

I thought they had to keep clients money ring fenced in a different account to the their business one so it's protected, but if they've lost their licence there is a possibility they haven't been doing things properly.

You could drop Maslins a PM on here. He runs MVL Online and where he can't help your situation he can give you an idea how the finances should be stored and who to chase.