Top Service News
Embrace the Insolvency Journey: Why Creditors Should Be Active Participants
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Never underestimate the power of completing and submitting your insolvency paperwork—it’s your key to navigating the insolvency process as a creditor! We asked our friends at PKF to share their thoughts with us and our members.
Submitting a proof of debt form when receiving notice of an insolvency is important as this will not only mean your claim is submitted for dividend purposes, but it will also allow a creditor the chance to have their say on the outcome of the pre-appointment process, and later on in the insolvency as it progresses.
Due to the limited and variable time frames of insolvency processes, timely submission is paramount to safeguarding creditor rights.
Once the proof of debt form is submitted, creditors gain several benefits:
- Have a say on who is appointed in the insolvency.
- Air any concerns about how an entity behaved.
- Have a say on the costs of the insolvency.
- Have a more direct say on how the insolvency progresses by forming a committee.
Submitting a claim gives access to the insolvency paperwork, which in turn allows a creditor the opportunity to vote on the appointment of an alternative insolvency practitioner of choice to replace the proposed firm of practitioners. This is done by using a proxy vote. This alternative insolvency practitioner could be a trusted insolvency partner firm who, if appointed, would have a more hands on approach to investigating a creditor’s concerns.
Having access to the paperwork and progress reports also allows a creditor to keep track of developments and to vote on decisions such as the insolvency practitioners fees. This keeps costs lower and could therefore mean more funds allocated to the dividend pot. In turn, this could mean enhanced returns to creditors.
If an appointment of an alternative insolvency practitioner of choice is unsuccessful due to voting outcomes, then another option to have a more hands on approach as a creditor is to request and vote in favour of a creditors committee. This will allow creditors a greater say in key decisions of the insolvency process.
All of the above are important reasons as to why submitting claims and proxies as a creditor in an insolvency are important and should not be delayed.
Given the complexity and duration of insolvency processes, creditors may find themselves overwhelmed by paperwork and communication demands. The Creditor Services team at PKF offer a free service to all Top Service members and can assist with the following:
- Advice and support regarding any formal or non-formal insolvency process.
- A bespoke lodging and proxy management service which alleviates the administrative burden for creditors and reports back on all insolvencies in a simplified format.
- Representation at creditor meetings.
- Seeking the appointment of licensed insolvency practitioners of PKF to investigate insolvent entities and creditor concerns.
If you would like to more about the services offered to Top Service members by PKF Creditor Services, please get in touch via creditorservices@pkfgm.co.uk
