Businesses and companies regularly receive notification of a customer going into a formal insolvency procedure and details of the ubiquitous creditors’ meeting. Attendance at these meetings is usually poor however, properly advised, these meetings can yield very useful information and increase the potential for recovery of goods and sums owed.
An example of this is a matter I dealt with last year. A solicitor’s client was facing a seven figure write off and major operational difficulties as a result of the failure of a key supplier. The client had received notice of the creditors’ meeting and asked his solicitor to advise. The insolvent business had been involved in a major refurbishment project on machinery integral to the client’s business. This work was incomplete and key parts had not been supplied.
The solicitors were initially seeking comfort about the IP involved, who they had not had dealings with. They were also seeking answers to a number of unanswered questions which were causing major business difficulties for the client.
Over a 24 hour period I was able, having spoken to the nominated IP, to establish a better understanding of the position, make him aware of the client’s position and needs for a quick resolution of the issue and to report back to the solicitor. We agreed a strategy to assist the client which involved me attending the meeting on their client’s behalf.
I attended the meeting and was able to secure the location and subsequent delivery of the missing parts. I was also able to get answers to the principal questions which were fundamental to resolving the operational difficulties referred to above.
In the absence of a creditors’ committee being formed, I reached agreement with the IP to meet at 6 weekly intervals for the first 6 months of the liquidation to enable me to keep our client updated.
This also helped the IP by bringing to light information he was not aware of, and which served enhance the level of realisations in this case and hence a better financial recovery for the client.