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Jamie-Law
Jamie-Law, Solicitor
Category: Law
Satisfied Customers: 2556
Experience:  Solicitor
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I would like your advice on an issue I am experiencing with

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Dear Sir / Madam,I would like your advice on an issue I am experiencing with an IP who I instructed to liquidate my limited company.I met with the IP who initially stated his fee would be £6,000 plus VAT.At the creditors meeting he advised that the job was bigger than he first envisaged and he increased the fee to £11,000.I was advised that this would be the final fee.The stock has now been sold for £71,000 which was more income for it than we first envisaged.I was the main creditor of the company as I had introduced over £190,000 as a directors loan.Once the figures were released and payments were received for the stock (£71,000) I was keen to find out how much I should expect in payment from being a creditor.I was shocked and disappointed to receive an email which read:XXX Limited
Estimated Final Outcome
Receipts
Sale of stock 70,000
Cash at bank 1,066
Debtors 0
71,066
Payments
Statement of Affairs fee 11,500
Auctioneer's commission 7,000
Auctioneer's disbursements 2,000
Rent 7,000
Insurance 1,000
Liquidator's disbursements 600
Liquidator's remuneration 25,000
54,100
Distributions:
Preferential creditors (100p in £) 2,000
Balance to unsecured creditors 14,966
71,066
Unsecured claims - not agreed Distribution (estimated)
Trade and expense 91,588 4,082
HMRC - PAYE 8,000 357
HMRC - VAT 18,547 827
Director – (Me) 192,677 8,587
Customer deposits 25,000 1,114
335,812 14,966
Distribution p in the £ 4.46So from the £71,066 assets which were realised I would only receive a payment of £8,587.Although we agreed on a fee of £6,000 the IPs final fees came to:Statement of Affairs fee £11,500 – I have found a contract (which was not clear) that the charge for this was £6,000 plus VAT but he has increased it)
Auctioneer's commission £7,000 – The auctioneer (who the IP was very friendly with) should have made his commission from the bidders in the auction which was advertised on bidspotter. The auctioneer’s terms of auction were the value of the stock PLUS VAT PLUS 15% auctioneers commission.
Auctioneer's disbursements £2,000 – I don’t know what this is for.
Liquidator's disbursements £600 – I don’t know what this is for.
Liquidator's remuneration £25,000 – The liquidators fees have risen from £6,000 (what we originally agreed on) to £25,000. As main creditor he did not make me aware the significant increase in his fees. I feel they are excessive and unjustified.I have since emailed the IP to advise I was bitterly disappointed and requested full details and breakdown of the fees. In the email I stated that unless we reach an amicable solution that I would take this further with a solicitor and raise a complaint through the government website.The IP emailed back to state that he did not like the tone of my email and has refused to respond to me any further or supply me with any further information on his fees.I am going to open an official complaint and I am wondering if I have any chance of suing the IP to claim money back as I believe his fees were non transparent and excessive. Also I did not agree to the large increase in his fees. To me it seems that he has just seen how much the stock was sold for and attempted to fill his pockets as much as he can get away with. Surely this is not legal?I await your response.ThanksMichael
Submitted: 6 months ago.
Category: Law
Expert:  Nicola-mod replied 6 months ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Expert:  Nicola-mod replied 5 months ago.
Hello,
I apologise as we have not yet been able to find a Professional to assist you. Do you wish for me to continue to search for someone to assist you or would you like for us to close your question at this time?
Thank you for your patience,
Nicola
Customer: replied 5 months ago.
Hi Nicola,Please give it one more day and then if not please refund me.thanksMichael
Expert:  Nicola-mod replied 5 months ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  Jamie-Law replied 5 months ago.

Hello Michael my name is ***** ***** i will help you with this.

How much are you seeking to claim please?

Customer: replied 5 months ago.
Hi there,thanks for your response.When I met with the IP originally he quoted me £6,000 for the proposed liquidation.This was the figure that I agreed to.After agreeing to that fee the IP asked for my personal address for his files. He personally recommended that I used the company address (which I no longer had access to) so that I could keep my personal address private, incase we had any angry customers who could find out where I live.I took his advice.I recently found out that the IP did send out his fee estimates to all known creditors but obviously I did not receive my copy as it was sent to the registered company address as this is what the IP had on file as my address. The IP knew I was the majority creditor and would not have seen the fee estimate.In the creditors meeting I was asked to sign paperwork to agree the fee. I presumed it meant the £6,000 fee which was initially agreed. To my surprise I was actually accepting his fee estimate of £25,000 for IP remuneration plus £13,000 for the statement of affairs. I find this very suspicious that I was not handed the fee estimate in the Creditors Meeting. When I become aware of what had happened I asked the IP why he did not hand me a physical copy of the fee estimate in the meeting, just asked to sign a piece of paper stating that I had accepted the fees (which I presumed was the £6,000 we had agreed on). The IP advised me that he didn't think there was any point of giving me the fee estimate as he presumed I had already received a copy - even though he knew my copy went to the old business address.I cant help but feel this was a premeditated plan to ensure that I did not see the fee estimates as I would no way have agreed to them as I knew that I would basically be accepting that the IP could help himself to the fast majority (if not all) of the realised money from selling the stock.I would feel a fair settlement would have been:Payments
Statement of Affairs fee 6,000
Auctioneer's commission 0 (as this was never mentioned and auctioneer has been paid £10,650 commision for selling the stock from a 15% bidders auctioneer commision payment)
Auctioneer's disbursements 1000
Rent 7,000
Insurance 1,000
Liquidator's disbursements 600
Liquidator's remuneration 8,000
Total £23,600 inc rent and insurance.This is £30,500 less than he has taken, meaning there would be an extra £30,500 for the creditors.I look forward to your feedback and to see if I have any chance to take this to court to claim financial redress?thanksMichael
Expert:  Jamie-Law replied 5 months ago.

Did the IP say why the fees went above that quoted?

Customer: replied 5 months ago.
No, he said that the fee should be within the estimate he quoted, however I was never made aware of the fee estimate as he sent my copy to my old work address, which he recommend I used for my personal address for his files.I thought the fees where £6,0000 as we originally agreed so I was not expecting the fees to rise.In his time cost allocation, he is claiming £350 per hour. One thing stood out where he has claimed over £1,000 to change the locks on the warehouse.This seems excessive?thanksMichae
Expert:  Jamie-Law replied 5 months ago.

Did not read the document you signed which said it could be £25k?

Customer: replied 5 months ago.
The IP was very sneaky. Please see above for detail.To summaries:After agreeing to that fee the IP asked for my personal address for his files. He personally recommended that I used the company address (which I no longer had access to) so that I could keep my personal address private, incase we had any angry customers who could find out where I live.I took his advice.I recently found out that the IP did send out his fee estimates to all known creditors but obviously I did not receive my copy as it was sent to the registered company address as this is what the IP had on file as my address. The IP knew I was the majority creditor and would not have seen the fee estimate.In the creditors meeting I was asked to sign paperwork to agree the fee. I presumed it meant the £6,000 fee which was initially agreed.The paperwork presented to me did not include the estimated fees. It only had part of the paperwork which asked me to sign to agree fees. As the fees were not presented to me I presumed it just meant i was agreeing to the £6,000 fee we originally agreed on.This was part of the IPs plan, to keep the fees hidden from me.When I asked the IP, why did you not include the paperwork with the fees to me at the creditors meeting, he said "I presumed you already had a copy as we sent the paperwork out to all know creditors" But I did not receive the paperwork because of his initial advice to put my address as the old business address to keep my personal address confidential.Its clear, it was all part of a well planned, premeditated plan. I was in a vulnerable position and inexperienced in insolvency. The IP took full advantage of the situation for his own commercial greed.
Customer: replied 5 months ago.
From the above message:"After agreeing to that fee" - this is referring to the fee we originally agreed on £6,000
Expert:  Jamie-Law replied 5 months ago.

Ok - if you signed it there may not be much you can do.

I would register an Online complaint with the official body.

You can do this here at: https://www.gov.uk/complain-about-insolvency-practitioner

They can consider your complaints and see what they can do.

But as the Company is in Liquidation it would usually be the Company who would take to Court. So I would go via this service and register a complaint.

If it is upheld the creditors may get some additional funds. But sadly that is all you can do at this stage.

Can I clarify anything for you about this today please?

Jamie-Law, Solicitor
Category: Law
Satisfied Customers: 2556
Experience: Solicitor
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