We were approached by the credit controller of one of our clients who had received correspondence from an Insolvency Practitioner relating to the proposed liquidation of one of their customers. The documentation included a letter addressed to all creditors and a proxy form for completing and returning ahead of a creditors' meeting under Section 98 of the Insolvency Act 1986. We provided our client with advice concerning the situation and the implications for it if their customer was placed into liquidation. We also assisted in completing and returning the proxy form and we sent a representative to the creditors meeting who reported to us on the outcome of the meeting and on a number of important issues that arose during the meeting, so we could better advise our client on his options.
We were asked to advise the directors and a credit manager of a company who were considering extending credit facilities to a long-standing customer. For a number of reasons, they were concerned about the financial status of the customer. With the assistance of one of our Insolvency Practitioner clients, we compiled a report which provided detailed advice on what we believed the financial status of the customer to be and specifically advised against extending credit facilities as the company appeared to be in the brink of insolvency. Our advice directly resulted in our client avoiding any further bad debt, because the company was indeed placed into liquidation shortly thereafter.
We were instructed by a credit manager to assist in recovering an outstanding debt from a customer who had offered our client 50% of the outstanding debt as he was in financial difficulties and was trying to reach an agreement with all his creditors. The customer was keen to continue trading his company but for reasons which were unclear he had a cash flow problem. We advised our client not to accept the proposal. Recognising that the customer wanted to remain in business, we determined to be the party who was "shouting loudest". We wrote to the customer demanding payment in full within 7 days failing which a winding up petition would be issued. After 7 days payment had not been made so we duly issued a winding up petition. We received a third party cheque in full settlement of our client's debt, a few days later.