Creditors and suppliers
Creditor FAQs
What does it mean that the company has entered into administration? Will the Company continue to trade?
Entering into administration means that the Company is now being managed by the appointed administrators. Their role is to assess the Company’s assets and liabilities and determine the best course of action to maximise returns to creditors. During this period, trading activity is expected to be limited, as the administrators focus on transitioning certain customers to alternative suppliers and completing a small number of projects where appropriate.
I am owed money, what notification will I receive?
The Joint Administrators will write to all known creditors of the Company (based on the creditor list obtained from the Company's books and records) to formally notify them of the administration appointments within 7 days of their appointment. This will be accompanied by information on how to submit a claim and a general website notice informing creditors that most future correspondence will be made available via a website rather than delivered by post or by email.
What type of creditor am I?
Creditors can be classified according to the type of claim they have. This classification determines the order of priority and potential level of any distribution.
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 floating charge holders and unsecured creditors in respect of relevant realisations.
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 (see below).
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 is the Prescribed Part?
When a secured creditor has a floating charge registered after 15 September 2003, a proportion of the funds available to them is set aside for distribution to unsecured creditors (known as the Prescribed Part).
The Prescribed Part applies in this case as there is a floating charge created after 15 September 2003. The amount of the Prescribed Part is:
50% of net property up to £10,000
20% of net property above £10,000
subject to a maximum of £800,000
Insolvency legislation sets out how the Prescribed Part is calculated and if it is applicable further details will be provided in the officeholders’ reports to creditors.
What further information will I receive?
The Joint Administrators will produce a report to all known creditors and members within eight weeks of the appointment. 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 or earlier if an Administrator vacates office or an extension to the administration is granted.
Can I opt out of receiving this information?
You have the right to opt out of receiving further documents relating to these proceedings.
The right to opt out only applies to documents required by the Insolvency Act 1986 or the Insolvency (England and Wales) Rules 2016 to be delivered to creditors generally or to a particular class of creditors. It does not apply to documents or correspondence sent to people in a capacity other than as creditor (e.g. as an employee) or to correspondence sent to individual creditors.
Further details on opting out will be provided to creditors in due course.
How to submit a claim
At this stage, we are unable to confirm the likelihood of funds being available for distribution to unsecured creditors and will update creditors in due course. In the meantime, we will contact creditors directly with instructions and, if relevant, portal access credentials in the coming weeks.
Estimated timeframe for reviewing my claim and paying a dividend?
The administration process is complex and it takes time to assess the Company’s position and provide an estimate of the value or timing for reviewing claims and making a distribution. The officeholders will include an update of any dividend prospects and, if possible, a timeframe in their proposals and subsequent reports.
Will you refund the costs incurred in preparing a claim?
We are unable to refund the costs in preparing a claim. Consequently, we cannot refund any expenses incurred in obtaining information necessary to make a claim.
Who can I contact if I have any other queries?
Please email Uk_juuce_creditors@pwc.com if you have any other queries.
Suppliers
Suppliers will be contacted directly by the administrators or their representatives where ongoing support or services are required. We kindly ask that suppliers await further communication, as engagement will be limited to those required to support the administration process.
