Creditors
I am owed money, what notification will I receive?
The Joint Administrators will write to all known creditors of the Companies (per the creditor list obtained from the Companies’ books and records) to formally notify them of the administration appointments within 7 days of appointment. This will be accompanied by information on how to submit a claim and a general website notice informing creditors that most future documents for creditors will be uploaded to a website rather than being delivered by post or by email.
What type of creditor am I?
Creditors can be classified as to the type of claim they have, these types will determine the quantum of distribution they will receive as the funds for each type is ring fenced.
The three main types of creditor are:
• Secured (split into security via fixed/standard and floating charges);
• Preferential; and
• Unsecured
Secured creditors have security registered at Companies House. When they have a fixed/standard charge over an asset, the secured creditor will be paid out of the realisations from that specific asset, after the costs of realisation have been deducted.
When they have a floating charge over an asset, the secured creditor will be paid out of the realisations from those assets, after the costs of realisation and other expenses of the insolvency procedure, the preferential creditors (see below) have been paid in full and the Prescribed Part (see below) has been set aside.
Preferential creditors primarily consist of employees for arrears of wages, accrued holiday pay, unpaid contributions to occupational pension schemes and state scheme premiums, all within certain limits.
As of December 2020 Preferential creditors include certain aspects of HMRC’s claim. These claims will rank as secondary preferential claims (paid after the employees’ claims) and consist of VAT, and PAYE and NIC deductions. Preferential creditors rank ahead of all other creditors when realisations are achieved from assets where there is no fixed charge registered.
Unsecured creditors are all other unsecured and non-preferential creditors (with the exception of shareholders/members). These are usually the normal “trade” creditors. They rank below preferential and secured creditors, with the exception of when the Prescribed Part is applicable.
Shareholders / members will be the last class of creditor to receive a distribution and they only receive a distribution after everyone else has been paid in full.
What further information will I receive?
The Joint Administrators will write to all known creditors of the Companies (per the creditor lists obtained from the Companies’ books and records) within 7 days of appointment to formally notify them of the administration appointments. The Joint Administrators will produce a report to all known creditors and members within one week of the appointments. This report, known as the Joint Administrators’ proposals, will outline the steps taken by the Administrators to date and set out the strategy going forwards. It will be made available via upload to this website following the issue of the website notice alongside the initial creditors’ letter.
The Joint Administrators are also required to provide a written update on the administrations to all known creditors every 6 months. This report will be published on the website within one month of every 6 month anniversary.
Opting Out
Creditors have the right to elect to opt out of receiving certain documents about insolvency proceedings. Any election to opt out will not affect a creditor’s entitlement to receive dividends, should any be paid to creditors. Further details on opting out will be provided to creditors in our initial letter.
How to submit a claim
Based on current information we do not expect that there will be a distribution to unsecured creditors of the Companies. If this position should change then we will update creditors in due course. You do not need to take any action at this stage, however should you wish to submit a claim, there are proofs of debt available to download from this website.
