TWO friends fell out. Money had been loaned from one to the other and their joint business venture had failed with losses suffered by the lender only. Where once there had been friendship, hope and enthusiasm there was now only bitterness and resentment.
Demand for repayment of the loan was made and bankruptcy followed.
BRI’s Peter Windatt was appointed trustee in bankruptcy and, following investigations into the estate, various transactions were pursued in order to recover funds for the benefit of the former friend, the only creditor.
Offers in settlement were made by the bankrupt’s family. However, in the creditors’ eyes, these were insufficient to satisfy him. The creditor was not looking for his “pound of flesh’, but the sum required was significantly above what would be received by him once all relevant costs and expenses had been deducted.
What to do?
Given that there was only the one creditor in this case, BRI were able to devise a cunning plan. Rather than pay funds through the bankruptcy estate, incurring what would have been an additional £25k of fees (a percentage of realisations which have to be paid to the Secretary of State), BRI proposed that the debtor’s family instead purchase the creditor’s debt, at a discount, subject to the family confirming that the debt then be written off. This is what happened.
It had been agreed that the costs of the bankruptcy be paid by the petitioning creditor out of the funds he received. And now, given that there are no longer any creditors, the debtor can also seek an annulment of his bankruptcy if he wishes (only granted where costs are paid and creditors satisfied).
Result: satisfaction on all sides and another example of BRI seeking the best result for all parties concerned. Another win-win all around.
If you/your business experience financial difficulties take advice promptly. BRI Business Recovery and Insolvency is contactable on 01604 754352 and via www.briuk.co.uk