To be honest as an Insolvency Practice, chairs in the office are generally the same size as elsewhere, however at Middlebrooks we thought that a ‘View from the Average-Sized Chair’ had less of a ring – our chairs are possibly more like the late, great Ronnie Corbett’s.
In a series of blogs, we aim to break down the barriers by introducing some insight into how we go about insolvency assignments. In the first of our blogs, we explore why talking is so important at the outset of an insolvency and throughout the process.
In today’s digital marketplace, talking has been replaced by letter, fax, email, instant messaging, text and social media – it’s a dying art. At Middlebrooks, although technology helps us do our work better, we believe that a well-placed conversation at the right time is worth a thousand emails.
As an insolvency practitioner, as in many professional services firms, each day leads to a different assignment and each assignment can lead to a different outcome – a similarity among all assignments, whether solvent restructuring or trust deed or administration is the communication and engagement that we have beforehand and throughout. This can be from a variety of sources, most notably the entity in financial distress, but can also be from creditors and other professional advisors.
From feedback we have had from individuals and directors, the main anxiety about receiving a statutory demand is that they have no idea what to expect. When approached to talk to a company or individual in distress, the first thing we do at Middlebrooks is listen. This is a pivotal meeting for an individual or set of individuals who are undergoing stress, and by listening to the situation and understanding who the various stakeholders are, the best results can be achieved for both the financially distressed entity as well as the creditors.
Not only is it good to listen during this conversation, but also to time the conversation correctly. As business recovery specialists, we have a range of people who can help businesses that are not ready for insolvency, but are perhaps needing a financial hand to hold. These options are generally only available where this conversation has been held with enough time left to help. There are options for breathing space, such as moratoriums (a mechanism to stop any further legal action), but these are difficult to employ when past the point of no return.
The next stage in the process is to talk. This usually involves talking about the future, what the process, whether administration, liquidation or sequestration will look like and what the company, directors and individual could expect in their set of circumstances. At this time, Middlebrooks offer a strategy for the process in order that all are aware of what the next few weeks and months is going to look like.
At this point in the process, many who have heard of insolvency will have heard the term ‘Statement of Affairs’. What isn’t widely known is that this can be a collaborative process with the help of the entities professional advisors. Despite the terminology that requires to be used, and the fact that the document is sworn by the directors or individual, at Middlebrooks we help to guide in the preparation of the document, making it’s 50-odd pages easier to handle. As part of the insolvency process, if the asset position allows, there is the option for the professional advisor to receive payment for this work as well.
Early in the insolvency process we also listen to creditors, after all as an appointed officer of the court, it’s on their behalf that we work and often it’s the creditors who have very useful information. What we don’t do is get involved in pre-insolvency disputes, and what we don’t do is help creditors with an ‘axe to grind’. Listening to, and engaging with creditors is what we handle on a day to day basis, and the more engagement we have from creditors and other stakeholders ensures that the process works better for all.
What is widely known about insolvency is the need for the individual or the directors to co-operate with the appointed Insolvency Practitioner, this can be enforced by either private or public examination. What isn’t widely known about this process, is that the examinations are often not necessary as the enquiries are dealt with over the telephone, at a meeting or dare we say it email rendering the need for examination unnecessary.
Throughout the process, communication is vital, both to ensure that no creditors are ‘forgotten’ and therefore still attempting to collect a debt, but also to being the insolvency to a swift conclusion – let’s be honest, who really wants to deal with an Insolvency Practitioner?
An insolvency process is fraught with difficulties by its very nature, but at Middlebrooks we firmly believe that difficulties can be overcome by us listening and you talking……. now where was that phone…….???