A good and logical start is to contact the Companies Court and enquire:

• If there is a current winding-up petition in relation to the company anywhere in the country
• About any possible administration application (if outside London, there is no central record, so phonecalls can be made to the Chancery division of regional High Court Offices (although note that it is not unheard of for a company applying for administration to apply in a court not nearby, so as to avoid creditors finding out)

Also, check the London Gazette, which can be done online for very recent entries.

In addition to enquiries you may make, if any formal process of insolvency starts, you should be notified as a creditor, although by this time, it may be too late to take any action yourself to safeguard your interests. As regards notifications :-

• On a creditors’ voluntary liquidation you should receive notice of a meeting of creditors to consider the company’s choice of liquidator.
• If the debtor is a company and a company voluntary arrangement is proposed, you should be sent a copy of any proposal, although if you are just one of many creditors or there is one major creditor, your wishes concerning any attempt to reject or accept the proposal may not carry much weight

If none of the above appear to apply, you may still have a hunch and decide to seek practical assurances from the debtor or tighten up your own policies and procedures where possible with the debtor. It is worth checking any contractual arrangements you already have and perhaps investing in some legal advice as to your options. Ifin any doubt, seek legal advice.

I believe a company has gone into insolvency, what are the easiest ways to confirm this?

• The most practical first step would be to phone the company. If formal insolvency process has started and any Insolvency Practitioner appointed, employees are generally instructed to make this clear to anyone contacting the business. If a company has ceased trading, it is highly likely that at the very least there will be a recorded message confirming this.
• Have a look at the company’s website, formal insolvency must be legally disclosed on this and notepaper and other communications such as email.
• The insolvency process should be declared at Companies House and also possibly  in the London Gazette although there may a time delay of up to a few weeks before this occurs

I believe that a company which owes us money was in administration but the assets have already been transferred to a new company owned by the previous owners and is trading again already. How is this possible and what happens to debts owed to us ?

• The above situation is known as a pre-pack administration. It is not that unusual and can infuriate creditors. As a starting point, it not illegal or unlawful in principle for this to happen, even where an agreement has been negotiated before the administrator’s appointment and finalised very quickly after appointment of an administrator.
• From a creditor’s perspective, one of the most infuriating aspects of a pre-pack administration is that liability for a debt owed by the company in administration does not transfer to the new company, which only buys the old company’s assets. Your only definite remedy will be a share of the sum paid for the assets by the new company. There are other options to challenge the behaviour of the directors of the old company and/or the administrator but these are far from straightforward, costly and risky. It is very tempting to want to take action against what you may consider to be outrageous behaviour like this, but this is a classic legal area where clear thinking and a commercial approach is vital
• You may decide that one method of recovering any losses incurred is to deal with the new company if it is an important supplier or customer but with very clear safeguards and, if possible on much more advantageous commercial terms for you.

If you are still in doubt, we woiuld suggest you contact commercial lawyers for help, or you may wish to speak instead with commercial investigators or debt buyers.

A company which buys goods from us has gone into insolvency. We have a retention of title clause in our contract with them. What is the status of it ?

• In principle, yes. Contract claims are not altered by formal insolvency process. You will however need to be somewhat cautious and to deal with the matter carefully via the Insolvency Practitioner appointed for the company.

The Insolvency Practitioner is likely to require that you are able to evidence :-

• A clear retention of title clause covering a clear debt owed to you by the  insolvent company.
• That you can clearly identify specific goods where title has been retained by you which can be separated and clearly identified and which have not now been altered or added to other components to form finished goods or which have now been moved to a place outside of the Insolvency Practitioner’s power and control.

Is it worth actively participating in insolvency proceedings as a creditor ?

Clearly, each case is different but if you are an unsecured creditor, you should find out fairly quickly whether there is much prospect of recovery and if so, the likely ballpark amount. Unfortunately, taking averages into consideration, unsecured creditor rarely achieve more than between 1-3% recovery of the sum owed but as stated above, each case is different.

Does a creditor need to actively take steps when a debtor goes into insolvency ?

Administration

An administrator should provide a notice of appointment to all known creditors quickly after appointment. If you do not hear from the administrator generally within about a week thereafter, you should write to him or her at the business registered office and follow this up as necessary if you do not hear back quickly thereafter. The administrator should then contact you with paperwork for you to complete to evidence the debt due to you.

Liquidation

With liquidation, the rules are stricter and an appointed liquidator must notify all creditors he or she is aware of of the liquidations within 28 days after being appointed. If you have not heard anything within this timeframe, adopt the same procedure as described above for administrations.

Latest research suggests that households will face their toughest year since 1977, with average disposable income falling by 2%,  equating to £780, according to one of Britain’s best-known economists. If that isn’t bad enough, it could take until 2015 for household incomes to recover to the 2009 levels .

The above projections come from Professor Roger Bootle, a highly respected economist who further cautions that the figures do not take into account the impact of any likely interest rate increases this year, which, if implemented would, according to his projections further reduce household disposable income to levels not seen since as far back as 1952.

Just to deepen the sense of gloom even more, Mr Boodle does not believe  the private sector will be able to soften the impact of the major public sector job losses by creating  sufficient  extra jobs..

As regards consumer spending, Mr Bootle expects this to fall by 1% this year  and possibly continue that trend next year.

All in all, continue tightening your belt and expenditure and look out for the obvious bargains there will be when you do spend !

From 5^th April 2011 all public sector organisations must comply with duties under the Equality Act 2010 to prevent unlawful discrimination, advance equality of opportunity. Public sector organisation are now required to demonstrate equality whether relating to age, sexual orientation and religion or belief in addition to the existing legal duties to ensure equality for disability, gender and race.

The Equality and Human Rights Commission has some excellent guidance available on it’s website on the new laws and how public sector organisations should approach the issue of equality.

No doubt there will be some organisations who implement the new rules better than others, there will undoubtedly be test cases and complaints, so watch this space for further developments, we will be keeping a close eye on how things pan out.

Our intention with this site is to offer some practical solutions to problems as provided by organisations or people we believe may be worth looking at. Our suggestions are simply that, suggestions. We are not endorsing any one organisation or individual as a panacea for a problem, it’s just our opinion. And opinions are like problems, we all have them !

As a start, a thank you to our partners in the making of this site, organisations who have agreed to regularly contribute :-

• Blackhawk Investigations LLP – a full service business intelligence agency specialising in Bribery Act compliance, due diligence, background checks
• Lloyd Platt & Co – well known specialist divorce practice, possibly among the best divorce lawyers in London
• Darlingtons Solicitors – Solicitors in London who advise on areas including employment law, mediation, property law, wills and probate