January is often a demanding time for businesses, large and small. After demanding trading over the Christmas period, some may even be forced to call in the administrators or go into liquidation.
If a supplier has gone into liquidation it's likely that you may not get all of your money (or indeed any of it) back. There are different types of liquidation, such as voluntary and compulsory liquidation.
During the early stages of an insolvency, an Official Receiver (OR) is usually appointed. They work for the Insolvency Service and are attached to the court. An Insolvency Practitioner (IP) may be appointed at a later stage (usually accountants or solicitors) who are authorised to deal with insolvency cases. The OR or/and IP takes control of the company. Their aim is to sell the assets and to distribute the money between the creditors.
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There is an order of priority in which the money is distributed. Generally speaking payments are usually made in this order:
• Secured creditors will be paid first,
• Then liquidators' fees and expenses,
• Preferential creditors (such as unpaid wages to employees and contributions to occupational pension schemes),
• Any creditor holding a floating charge over an asset,
• All unsecured creditors, (this is where most Carillion subcontractors will fit)
• Any interest payable on debts,
• The shareholders.
Practical steps you should take include:
• Obtain your evidence of the debt i.e. invoices,
• Register as a creditor with the OR or/and IP and complete a proof of debt form,
• Wait for further information from the OR and/or IP.
Carillion Plc
It was confirmed on Monday 15 January that one of the UK's biggest construction forms and government contractors, Carillion, has gone into liquidation. The Official Receiver has been appointed by the court as liquidator of Carillion Plc. It was announced that PwC have been appointed as Special Managers to assist the Official Receiver.
