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Max Lowry
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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Hi there, I had no choice but to dissolve my previous Limited

Customer Question

Hi there, I had no choice but to dissolve my previous Limited Company and I was adviced by an IP to proceed with an IVA as the IP became the biggest creditor and that they would vote for the IVA and thus is would be passed.
The HMRC have a different view and they have said that the previously dissolved company has no vote as it is a "Associated Creditor"? The IP suggests that as I have no control on over the dissolved company they should be allowed to vote?
The ramifications are very serious as you can imagine..!!!
Best regards
Andrew
Submitted: 2 years ago.
Category: Law
Expert:  Max Lowry replied 2 years ago.
Hi, welcome to the site. My name is ***** ***** I will help you with your question. Could you please tell me exactly what your question is? Also, why is the IP your creditor? In what capacity is he your creditor? Are HMRC objecting to the IVA being approved? Is the IP creditors vote and other creditors apart from HMRC not enough to approve the IVA? Thanks
Customer: replied 2 years ago.

Hi Max

In short I was a Co Director but the business was then dissolved leaving debts to the company and the HMRC. The IP said the best way was to close all matters was to proceed with an IVA and as the Limited Company was the largest creditor it would vote for the IVA and thus it would be approved.

The HMRC asked the Chairman to exclude the vote of IP on behalf of the Limited Company because it said it was an Associated Creditor? The IP of the dissolved company said we are not as we have no control over the business now or in the future?

I hope this helps...

Thank you

Andrew

Expert:  Max Lowry replied 2 years ago.
Thanks for the information. Is the company in liquidation and the IP is the liquidator of the company? And the IVA is to deal with your own personal debts? I would just like to clarify these points please.
Customer: replied 2 years ago.

Hi Max

The Company has been dissolved and we have an IP for the Limited Company and then he referred me to another IP who ran us through the IVA and in that IVA is is covering both our Personal Debts and the Limited Company which I think may well be the Directors Loan Account if I'm mistaken...

Many thanks

Andrew

Expert:  Max Lowry replied 2 years ago.
Thank. I understand. I'm afraid that under the Insolvency Rules the company is an associated or connected creditor. HMRC is wrong. Your IP is right but for the wrong reasons. However, even a connected creditor is perfectly entitled to vote. Such creditors are often used to make the 75% required to pass the vote. The important point to note with such creditors is that they will not receive a divdend.
I hope this helps.
Customer: replied 2 years ago.
Thank you Max so in effect even if the old Limited Company is a connected or Associated Creditor they are still able to Vote Yes or No to the IVA?
Thank you
Andrew
Expert:  Max Lowry replied 2 years ago.
Hi Andrew, yes. That's correct. There are two stages to the voting process. In the first stage 75% in value must vote yes for the approval of the IVA - this can include connected creditors. As long as the 75% vote yes it will move to the second stage. Here, there must be 50% in value of creditors (excluding connected creditors) to vote yes to approve the IVA.
The bot***** *****ne is connected creditors are entitled to vote.
Max Lowry and other Law Specialists are ready to help you
Customer: replied 2 years ago.
Thanks Max as that is very helpful and although I fear the worst at least I know where I stand as once the Associated Creditor is removed for the second round of voting the HMRC will deny it due to their shared owed is more than 50% Etc..!!
Now I need to find a way to keep our house although there is not a fantastic amount of equity (£50,000.00 at best) and the worst part is I gave to pay more than that via the IVA? I have a car in HP with no equity or is my car in jeopardy too?
Talk tomorrow and thank you....
Andrew
Expert:  Max Lowry replied 2 years ago.
Thank you for the rating.
If the car is in HP I won't be touched by your creditors. The HP company shouldn't have any problems you retaining the car as long as they are satisfied you can/will make the monthly payments.
Customer: replied 2 years ago.
Thanks Max and I'm assuming you are not in the UK..!! Not that it matters but I may need your help again as if I'm offering more via an IVA than will be realised from making me Bankrupt and selling the house do I have an argument for the Bankruptcy Petition to be denied? It appears to me that the HMRC are looking to prove a point so to speak rather than secure the higher amount for the Crown?
I'm pluming for the U.S.A by the way?
Thank you
Expert:  Max Lowry replied 2 years ago.
Hi Andrew, I am based in the UK.
The test for bankruptcy is whether you can pay your debts as they fall due. If HMRC petition for bankruptcy then you can stop them by either disputing the debt or you reach an agreement with it to repay the debt.
I'm happy to assist if you require more help. You will need to start a new question which should be marked for my attention.
Max