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Stuart J
Stuart J, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 25
Experience:  Senior Partner at Berkson Wallace
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I need advice as to how to respond to a liquidators request,

Customer Question

hi, I need advice as to how to respond to a liquidators request
JA: What state are you in? It matters because laws vary by location.
Customer: i was a company director who went insolvent in November with an overdrawn DLA
JA: Has anything been filed or reported?
Customer: company concluded 15/11/19
JA: Anything else you want the Expert to know before I connect you?
Customer: not really - uk insolvency advice really
Submitted: 6 days ago.
Category: Bankruptcy Law
Customer: replied 6 days ago.
I was managing director of a company that went into receivership. There was an overdrawn directors loan account of £78424 but due to redundancy payments being credited to me that figure has dropped to approximately £65500. I am the owner of three properties that I am putting up for sale two of which were used for business purposes (5 New Chapel Street Blackburn & 55a Park Road Wigan) and one is my personal house before I get into mortgage difficulties.
The properties for business purposes had/have a charge upon them as they were used for collateral for the business overdraft. The amount is either 53k or 58K but it is my understanding that the payment would be taken out of monies paid to me. For calculation will use the 58K figure.
The question is about the allocation of that withdrawn money. Essentially the fact that the bank takes the money and then ceases to be a creditor on the sale of either of the two business properties should have an effect on the amount of the directors loan amount surely? Whilst I am aware that preferential payment of creditors is not permitted I do not think this can be fairly described as preferential payment as I am not making any decisions. Thinking it through I can see three options
1) Nope – Just out of luck. You will need to make sufficient profit from the sale to cover both the loan and the overdraft. Monies are 58k + 65.5k or 123k
2) Yes – I am right. The reduction of the creditors is fully credited to me and I need to pay separately the bank and the receiver. Monies are 58k to bank from sale and 7.5k to the receiver from sale surplus with a total payment of 65.5k
3) Sort of – Calculations are made. Essentially the reduction in creditors is apportioned to me. If the ledger is 232k and reduced by 58k then a quarter is credited to me. In that case the money would be 58k (charge on property) + 65.5k (DLA) – 15k(quarter of charge) coming to roughly 108K
The meeting is tomorrow at 11am, is it reasonable for the liquidator to ask for a charge? Can i refuse? what happens if i refuse?
Customer: replied 6 days ago.
Sorry UK law
Expert:  Ed Turner replied 5 days ago.

Hello. I am Ed, a Solicitor qualified in England & Wales with over a decade’s experience in the legal profession advising clients.

 

I specialise in Commercial Contracts, Business Transactions, Employment, Dispute Resolution, Personal Injury and Road Traffic Law and will be able to resolve your legal problem today.

 

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