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The changing face of Insolvency - news article image

The changing face of Insolvency

21 Feb 2018

3 minute read

Paul is an Insolvency Manager who is approaching 15 years of service with Shaw Gibbs. With a background spanning nearly 30 years, Paul trained at the Official Receiver’s Office in London and spent 12 years with KPMG in London and the South East regions. When Paul moved to Oxfordshire in 2003 he secured a job at Shaw Gibbs (then Shaw & Co). We spoke to Paul about the changing face of insolvency over the last 15 years and his predictions for the future of the market and the insolvency profession.

What has changed in Insolvency over the last 15 years?

The major change has been the new Insolvency Rules which came into force in 2016, which have changed the insolvency landscape and the procedures around: transparency for creditors; working procedures and how Insolvency Practitioners (IPs) are remunerated. The work has become more procedural and fees are increasingly agreed on a fixed fee basis. The conventional ‘bread and butter work’ of bankruptcies and Individual Voluntary Arrangements (IVAs) have dramatically decreased and the majority of our work now tends to be Creditors’ Voluntary Liquidations (CVLs) and Members’ Voluntary Liquidations (MVLs).

The new rules are a positive change for creditors as more information is available to them. For example, physical meetings can be requested under certain criteria and annual reports and other information are available to download via bespoke portals. This intelligent use of technology has seen a vast reduction of the amount of the large hardcopy mailings traditionally sent by IPs. 

The profession has adapted to the new regulations and shrinking market and there is an increase in the provision of advisory services, hence the renaming/rebranding of many insolvency practices and departments across the UK (including our own to ‘Insolvency & Advisory’). Advisory work is varied. For example we recently advised a sole trader who was being petitioned by HMRC to wind up his business. We assisted by putting together a letter and a statement of assets for the court and he was granted an adjournment of the hearing to allow him time to pay, enabling him to continue trading. Advisory work can also involve looking at large group structures and helping the Board decide on whether a group company needs to go through an MVL to provide a tax efficient way of drawing down the business or it can be simply advising the Board on cash-flow or company debts. 

What has changed in Shaw Gibbs? 

The Oxford based Insolvency & Advisory team at Shaw Gibbs have all been with the firm for 10 years or more, however, we have gone from one to three IPs resulting in a large influx of new and varied cases. 

The expansion of Shaw Gibbs into the London market with our offices in Marylebone has been a significant change for the firm as a whole. In the department, we found that we needed more of an insolvency presence in London and we are fortunate enough to have found Karyn Jones (formerly Insolvency Squared) who is providing us with the expertise and London contact-book we required. 

Shaw Gibbs joining the DFK network has provided us with opportunities for us to work with IPs across the UK and Ireland and the traction of referrals and information sharing between member firms has been impressive. 

What are your predictions for the rest of 2018? 

2018 has already seen uncertainty in the collapse of big companies such as Carillion and others facing distress. I predict that there could be more High Street brands that find this marketplace to be very difficult, especially when operating under squeezing margins and facing Brexit ambiguity. I can see more mergers and acquisitions in insolvency practices, especially with the smaller firms not being able to comply so readily with the new rules. 

I have no doubt that Shaw Gibbs can continue to be a forward thinking and progressive practice and the evolution of the firm and the department will no doubt continue at speed over the next year.

The changing face of Insolvency - news article image

Author:

Paul Beecham

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