Time costs of office holders and their staff are recorded in 6-minute units at the charge-out rates shown. Office holders may be assisted by self-employed individuals engaged to fill temporary or infrequent gaps in the firm’s permanent staff resources. Such individuals operate in a manner similar to other membersof staff and their time spent on case administration is recorded at whichever rate shown here is appropriate to the role they perform.
These rates are reviewed periodically and are subject to inflationary or other adjustments. Up-to-date schedules of charge-out rates will be provided in all future reports.
For further information regarding fees, please download the relevant Guide at panel.sfpgroup.com or a hard copy will be provided on request.
Further information regarding insolvency processes in general is available at www.creditorinsolvencyguide.co.uk
SIP9 provides definitions of Category 1 and 2 expenses. They are always directly attributable to the estate to which they are charged. In general terms, office holders may discharge Category 1 expenses from the funds held in the insolvent estate, whereas the relevant authorising body must approve the basis of any Category 2 expenses before they may be charged to the estate. The relevant authorising body is whoever has the statutory right to approve the basis of the office holders’ fees. This is usually the general body of creditors or a class of them. Please note that reports or fee-related documents issued by the office holder before 1 April 2021 may have described the office holders’ expenses in a different manner to reflect the version of SIP9 that was effective at the time. If you require information on the policies applicable to earlier periods, please contact this office.
|Senior Manager 2||475|
|Senior Manager 1||450|
|Senior Administrator 2||325|
|Senior Administrator 1||300|
Category 1 expenses are payments to persons providing the service to which the expense relates who are not an associate of the office holder.
Category 2 expenses are payments to associates or which have an element of shared costs. Set out below are the bases of the office holders’ expenses in this category. The report accompanying this appendix may detail other Category 2 expenses specific to the appointment in question.
SFP Property is a surveying practice, which provides property valuation and sales services. SFP Property has shareholders in common with SFP. Although the office holders and their staff could undertake some of the work carried out by SFP Property, e.g. liaising with landlords, tenants and interested parties, it is considered more effective and efficient to arrange for SFP Property to deal with all matters relating to properties. In addition, in view of SFP Property’s proximity to SFP, including the sharing of resources such as office space and finance staff, it is considered that SFP Property provides better value than any outside agencies. Although, of course, this arrangement benefits the common shareholders, it should be remembered that in the event that realisations are limited, SFP Property will not receive full payment for its time costs incurred. SFP Property’s fees are charged on the basis of the time costs incurred at the following rates:
|Grade||Rate £/hr||Grade||Rate £/hr|
|Director||350||Senior Administrator 2||175|
|Senior Manager 1||275||Senior Administrator 1||155|
|Senior Manager 2||250||Administrator 2||135|
|Manager 2||225||Administrator 1||115|
It may be necessary for SFP employees/directors to incur travel, subsistence or accommodation costs payable to third parties in order to attend at locations other than SFP’s offices for the direct purposes of the appointment or engagement in question. These will only be charged to the estate at cost and will not be approved for payment by the estate unless they are considered fair, reasonable and proportionate to the appointment or engagement.
SFP pays its employees (including directors) for using their own vehicles in travelling to/from locations (other than SFP’s offices) as required for the administration of cases. At present, employees are paid at the following rates and consequently the charge made to the estate will be at these rates, although these may change in future especially to reflect any changes to HMRC’s approved mileage rates.
Office holders may sub-contract other work that could otherwise be carried out by them or their staff. The following explains what typically is sub-contracted out and why. Please refer to the accompanying documents for information on the specific circumstances of the case and on how much this work will, or has, cost.
Pension Specialists Where a pension scheme exists, pension specialists are instructed to conclude all pension scheme matters, which can involve winding up schemes and applying to the Redundancy Payment Service for payment of pension contribution arrears. Although these matters could be carried out by the office holders or their staff, it is appropriate to draw on the substantial knowledge and expertise of the pension specialists, who are also able to operate in a cost-effective manner.
Employment Specialists SFP has staff with the knowledge and experience to deal with most matters relating to employees and former employees of insolvent businesses. However, particularly in cases with a large number of employees, external employment specialists may be instructed as they have cost-effective systems in place to process employees’ claims in bulk. Employment specialists may also be engaged to assist in high profile or complex cases, as they have greater expertise to deal with such matters.
Debt Collection Agents In some cases, office holders will engage other parties to pursue payment of outstanding sales invoices. Sometimes specialist debt collection agents, who have knowledge and experience in collecting the debts of a particular industry will be instructed. In other cases, the office holders may engage individuals (whether in their personal capacity or by engaging with the individuals’ new employer or company) who were previously employed by the insolvent entity to do this work. In both these circumstances, because of the debt collectors’ specialist knowledge and often their relationships with the debtors, they are likely to be achieve better results than the office holders or their staff. In some cases, office holders may decide to instruct a debt collection agent on the basis that it will be cheaper than the staff to carry out the work at their standard charge-out rates.
Insolvency Claims Specialists An office holder’s investigations sometimes identify claims that may be pursued for the benefit of an insolvent estate. Due to their specialism, it is often the case that recoveries can be made quicker and more effectively if insolvency claims specialists are instructed to assist in pursuing such claims. Thus, while office holders and their staff have the knowledge and skills to pursue such recoveries in the first instance, they may decide to engage an insolvency claims specialist at an early stage in the interests of the insolvent estate.
Storage Agents On older appointments (i.e. before c.May 2021), the office holders usually instructed independent agents to box up the insolvent entity’s relevant books and records, create an inventory of those records, transport them to their storage facilities and store the records until such time as they can be destroyed. In most new appointments, the office holders now instruct independent storage agents to transport the insolvent entity’s relevant books and records to the office holders’ offices so that they can be scanned for electronic filing purposes and then the storage agents destroy the hard copy records. Holding the records in electronic form is far more useful to the office holders for their investigation purposes and it saves on the ongoing expense of storing the hard copy records with independent agents often for several years.
Advertising Agents In all cases, legislation requires office holders to have statutory notices published in the London or Edinburgh Gazette. Although it is possible for the office holder to submit such requests directly to the Gazette, they use specialist advertising agents. For a small additional fee, the advertising agents check the submissions for obvious errors and omissions and can ensure that notices requiring urgent attention are dealt with swiftly.
Press Agents In a few cases, it is valuable to the administration of the case for press agents to be engaged to assist in publicising the insolvency. For example, publicising may assist in bringing the insolvency event to the attention of unknown creditors or parties who may be interested in purchasing the business or assets. Press agents have the knowledge and expertise to determine how best to publicise matters and are more effective than the office holders or their staff would be.
SFP has staff with the knowledge and experience to deal with all tasks which are required to be undertaken on insolvency cases. That said, there are certain tasks which do not require the level of knowledge and experience which the majority of SFP’s staff hold, yet these tasks take a material amount of time to complete. These matters include, but are not limited to, preparatory work to assist with an office holder’s investigations as well as tasks associated with the closure of a case. External parties have cost-effective systems in place to deal with tasks of this nature in bulk and may be engaged to assist in certain matters.
We should like to draw the following points to your attention:
It is important that the above procedures are followed, as failure to do so could result in penalties or personal liability being incurred by members of the Board under the provisions of the Insolvency Act 1986.
Please note that nothing contained within this engagement instruction should be taken as directing the Board to do anything which would compromise the safety of the Board, the Company’s employees, agents or any third party.
The current government guidelines and requirements in light of the COVID-19 pandemic must be followed first and foremost and public safety is paramount.
Provision of Information
In order to initiate the processes to place the Company into liquidation, you will be required to provide the information on the Company’s history and its current assets and liabilities. You will be provided with a detailed list of information required.
Deemed Consent Procedure
Statement of Affairs and Report to Creditors
Objections and Requests for Meeting
Meeting of Creditors
Liquidating a company is a complex legal process subject to regulatory requirements in the insolvency legislation, Statements of Insolvency Practice (“SIPs”) and those of our regulatory bodies. As the assignment develops, our role changes and it is important that we make you aware of how this may affect you.
To date, as the Company’s advisor, we owed our prime duty to the Company acting through its Board and took appropriate steps to ensure that the Board received appropriate advice on its options.
From now on, as our Insolvency Practitioner becomes a potential Liquidator, he will have to take a more independent and balanced approach, arranging for independent valuations of assets and recording information about the Company’s affairs and dealings without compromising his future duty as Liquidator. Any advice that he gives from this point will have to remain independent to avoid compromising the potential appointment as Liquidator and may have to be disclosed to creditors.
Once appointed Liquidator, our Insolvency Practitioner will owe his prime duty to the creditors as a whole and must act as an officer of the Court. He will have to realise and distribute assets, maximising realisations for creditors. He will have to investigate the Company’s affairs, which may lead to action being taken against individual Directors in respect of transactions and the disposal of assets entered into by the Company, and/or adverse reports submitted to the Secretary of State under the Company Directors Disqualification Act (“CDDA”). This may, from the Board’s perspective, appear hostile, although the Liquidator will merely be fulfilling his statutory duty as required.
We would also like to take this opportunity to draw the Board’s attention to the provisions of Section 216 and 217 of the Insolvency Act 1986 which are briefly explained below.
As you are a Director of the Company, once the Company is placed into liquidation you will be prohibited from using any name by which the Company was known, including any trading names, or a name which is so similar as to suggest an association with that Company.
The restriction from using a prohibited name applies for the period of 5 years beginning with the day on which the Company is placed into liquidation and except with the permission of the court you cannot:
There are, however, three statutory exceptions to the restriction imposed by section 216 of the Insolvency Act 1986 and these are set out in Part 22 of the Rules. One of these exceptions involves the creditors being notified within a specific deadline that a company will be using a prohibited name. However, you should be aware that, although the Rules provide a 28-day timescale within which this matter may be addressed by means of a notice published in the Gazette and to all the Company’s creditors (see Rule 22.4(3)(a)), the notice must be given and published before a Company Director acts in any of the above capacities. If this timescale is not met, then it may be necessary to apply to court for permission to use the name (see Section 216(3)).
It is a criminal offence to contravene section 216 of the Insolvency Act 1986 and if you act in contravention of this section you are liable on conviction to imprisonment and/or a fine. In addition, by virtue of section 217 of the Insolvency Act 1986, a person who is involved in the management of a Company in contravention of section 216 is personally liable for any debts of the Company incurred during the period of that involvement.
You should seek independent legal advice both to ensure that you do not contravene section 216 and if you wish to take advantage of the statutory exceptions.