Those of you who occasionally still get Secretary of State appointment cases from the OR will realise that sometimes the assets are not as described and either do not exist or have no realisable value. Examples of this would be where there is a credit balance at the bank but the bank is exercising a right of set-off against another overdrawn account or guarantee liability; or book debts where there are no supporting invoices or documents and the debts are disputed. If after appointment you quickly and easily ascertain the true position, and that position should have been ascertained by the OR prior to your appointment, then you need to consider whether you want to keep the case. If you do not, then contact the OR and ask to be removed as trustee or liquidator. This is a simple administrative exercise for the OR and IP Compliance Unit. You should also consider whether you want the OR to meet your costs associated with the abortive appointment, but I would suggest only doing this in the cases where it was really obvious that a Secretary of State appointment should not have been made.
However, if the OR indicates that the case does not have any tangible assets but has intangible assets such as possible preferences, transactions at undervalue or wrongful trading, then you know you are taking a bit of a flyer, and clearly you cannot return the case if the assets prove unrealisable. The other exception to this approach is property cases from PRU, where the terms of the rota is that they will not make enquiries about the bankrupt’s interest in the property and that you take the case warts and all.
A word of warning though, this only applies to Secretary of State appointments, it does not apply to appointments at meetings of creditors. In such cases you will have to administer and then close the case as normal.
