The administration of bankrupt estates and insolvent companies is not a job for the faint hearted, the squeamish, or those looking for a quiet life.
Every insolvency is invested with strong emotions; creditors are understandably angry to learn of their loss, employees may suffer the stress of being thrown out of work without adequate notice, customers face the frustration of lost deposits and incomplete jobs, bankrupts and directors face crises of confidence in themselves, and marriage breakdowns are often the bedfellows of financial difficulties.
Add to the emotional burden the fact that investigations have to be carried out, often using incomplete information or even deliberate misinformation, sometimes going back some years. Tangible assets have to be identified, categorised, and realised before they disappear. Remember that claims have to be adjudicated on, apparent offences have to be contemplated, documented and reported on, preferential payments need to be recouped from credit managers who were just doing their jobs, and other insolvent and or fraudulent transactions have to be reversed in often difficult court processes.
And all of this has to be done without undue delay and commercially, transparently, efficiently and often with inadequate funding.
And it seems that almost every stressed out stakeholder has his or her strongly held opinion about what went wrong, who is responsible, how assets should be realised, what offenses have occurred and why related parties should not get to vote or share in a dividend.
And in the middle of all of this is the insolvency practitioner trying to remember Kiplings poem “If”, the first four lines of which read;
IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too
The point of this article is that disputes, antagonisms and misunderstandings are all but unavoidable in many insolvencies. But there are some things which an insolvency practitioner can and should do to reduce the level of dispute. Our approach is:
To be as transparent in our dealings as commercial reality allows. With that in mind we allow creditors and other stakeholders web access to information, which is updated daily.
To promptly share all relevant information and our analysis of that information with effected parties, so that they at least understand why we have taken a particular view (even if they do not necessarily) agree with our conclusion.
To involve stakeholders in the decision process wherever possible. This can be done either by way of formal creditors meetings, by consulting committees of creditors or even by taking informal soundings from the larger creditors or other influential stakeholders.
To welcome the receipt of informed criticism and to promote the use of our “Complaints Policy” where necessary.