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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My company has a debtor with a company that has gone

Customer Question

Hi
My company has a debtor with a company that has gone into an insolvent liquidation.
The company owes approx £60,000 to 6 companies. I am owed £30,000 of that and am the biggest creditor.
The insolvent company is owed £11,000 which they should be receiving shortly.
How will this £11,000 be used? As the insolvent practitioner are being very cagey on the matter, which makes me think they will keep it for themselves.
What is the correct process for this £11,000. will it be split based on debt proportion, so I would get 50% of it.
Also to note, the liquidators have already been paid there fee of £6,000.
Thanks
James
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.ix companies.
The insolvency practitioner appear to have been paid their fee. The balance should be paid out to the remaining creditors pari passu. This means that each creditor will be paid proportionately in accordance with the size of the individual debt. However, if your debt can be trumped by, for example, a preferential creditor that might gobble up all the remaining assets.
I would suggest that you write a letter to this practitioner who must be a licensed insolvency practitioner, advising him of how you expect the surplus funds to be distributed. Should such a distribution not be made than the practitioner can be reported to the relevant regulatory body and to their professional institute if they have one.
Your surmise that you will receive 50% appears correct.
I do hope I have assisted you with my answer.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.