This is the first of two articles derived from the SPIC conference. It was good to meet so many of you there and to those who only got a passing glimpse, or failed to spot me at all, I apologise.
Leyland Daf really dominated the first day. In anticipation of that, I had made some enquiries and found that the Insolvency Service were, as formally announced by Ron Robinson this week, looking to insert some appropriate legislation in the new Companies Bill. This will deal with the problem going forward, as will the general improvement in the Crown’s attitude.
This doesn’t deal with your existing cases, but my enquiries suggest that all is not lost. Basically, the Crown departments have been receiving requests from IPs for their reasonable costs in realising assets covered by a floating charge and are prepared to take a sensible view. Don’t expect to get your bond disbursement back and I’d be surprised if time spent doing your D return will be paid, but reasonably direct costs with a sensible amount of overhead included in the rates have a chance of getting approved. The important thing is that HM Revenue and Customs will expect to benefit, so trying to ‘mop up’ the entire balance will not work. They are more likely to approve some remuneration where they have a recognisable result for the efforts you are charging for.
Just to knock it on the head once and for all, the ingenious idea put about at a recent series of seminars, namely to write to the bank to ask them to retract their floating charge in cases where they would not see any dividend after the preferential creditors have been paid, is not appropriate. The benefit of this approach is that the preferential claim would no longer be paid out of floating charge funds, restoring the priority of the liquidator’s fees. In the first place, as pointed out at the seminars, the ethical guide prevents you from taking action in your own interest and there can be no other reason for writing to a bank and asking them to lift their charge. Secondly, my enquiries suggest that while HM Revenue and Customs might be prepared to ignore a few minor events, there is a very significant risk that they would take interest in a larger case, potentially both recovering the money through the courts and complaining to the IP’s regulatory body. Such an action would be a fitness and propriety issue and would put your licence in jeopardy. It cannot be worth the risk.
