Insolvency practitioner working with BDO creditors speaks on "shambolic" liquidation
The situation regarding the BDO and it's commercial arm BDO Enterprises ceasing to exist through liquidation has been a real talking point in recent weeks; no more so than for leading insolvency practitioner, Lane Bednash; who has been working with the creditors of the BDO-E.
Bednash spoke to Tungsten Tales in an exclusive interview and he discussed how the company went into a CVL (Creditors Voluntary Liquidation); but when requested for a meeting instead of a rubber stamping exercise for the directors to answer any questions, he revealed they didn't show up and so nothing has been resolved.
"Unfortunately there was a no show by the directors who convened that meeting. So we never got the opportunity to ask any questions of the directors," said Bednash.
"It is a requirement for the directors to chair the meeting so you would expect directors to be available for that meeting. You don't expect to be stonewalled effectively by the Board of Directors."
"Ultimately though, the company is placed into liquidation by the shareholders which ultimately in this case is the BDO .
So the directors would argue that because no resolution was passed to put the company into liquidation in the end that they needn't attend; but that isn't the case as far as our creditors are concerned; they wanted the director to be present. They expected the BDO to do the honourable thing having started the insolvency process."
"No resolutions have been passed and they've got nothing to show for it"
Bednash taking over 120 cases a year of this kind has called what the BDO did in this instance 'extremely rare' as well as 'shambolic'.
"It's extremely rare. To get to this stage to sit in front of a room of creditors knowing that the resolution hasn't been passed is extremely rare.
In the other cases it has happened, I can think on one hand how many times it has happened in my 25-30 years. Proper, genuine explanations are provided," he continued.
"When you look at what they've done, they sell all the tangible assets to the BDO; so the BDOE has no tangible assets.
The money they raise to do that which is somewhere in the region of £7,000 was in the main used to pay for this process up to last week's meeting; obviously they've spent that money, no resolutions have been passed and they've got nothing to show for it."
"The obvious thing was to pass the resolution unless I'm guessing; there is maybe something they're concerned about, there is something that that they're hiding."
"The insolvency practitioner who they nominated and ultimately wasn't appointed; he himself described the position and state of this liquidation as 'shambolic'; I think that's the right word."