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Business Debt Help - What to look for in your Insolvency Advisor (part 2)

In my previous article I described the personal qualities to look for in your insolvency advisor, but as the circumstances below make clear, the financial conduct of the advisor or his firm is also relevant.....

Insolvency advice company Baker Donald Ltd ordered into provisional liquidation

Baker Donald Ltd, a Chesterfield-based company which offered insolvency advice and also traded as a licensed Insolvency Practitioner, was put into provisional liquidation on public interest grounds on 18 February 2014 by the High Court in Manchester.

The order follows a petition presented by the Secretary of State for Business, Innovation and Skills and an investigation by the Insolvency Service. The Official Receiver has been appointed as Provisional Liquidator.

The company stated that it initially traded providing general corporate insolvency advice, referring client cases to an Insolvency Practitioner. Latterly, it employed an in-house Insolvency Practitioner and handled cases itself. The Secretary of State’s allegations include that the company’s failure to maintain, preserve and/or deliver up accurate accounting records means that it was not possible to distinguish between funds held on behalf of clients or third parties and those belonging to the company.

The role of the provisional liquidator is to protect assets in the possession of or under the control, of the company pending the determination of the petition. The provisional liquidator also has the power to investigate the affairs of the company insofar as it is necessary to protect the assets including any third party or trust money or assets in the possession of or under the control of the company.

The case is now subject to High Court action and no further information will be made available until the petition is heard in the High Court on 14 April 2014.

Baker Donald Ltd was incorporated on 30 November 2011. Its registered office is at 79 Saltergate, Chesterfield, Derbyshire, S40 1JS.”

Should you really trust an Insolvency practitioner that may be cheap, but may also not be financially stable?

Insolvency practitioners handle client money and a great deal of trust is placed in the practitioner.

Mixing client funds with your own funds is a massive no no, in all circumstances.

I have seen over the last year or so, a growth of ‘online insolvency practises’ usually offering low balling offers to carry out work at very low fee levels, with some operators literally working from their kitchen table.

Whilst there are no guarantees a firm with fancy offices will do a better job, or be more financially stable, you do need to be able to trust your advisor.

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