I've been chasing an outstanding invoice for work we carried out last July. We've had various excuses and promises and today a thick envelope popped up in the post.
The company in question is proposing a Company Voluntary Arrangement and we are therefore being given notice of a meeting of creditors to discuss the proposals. It is proposed that they repay an amount each month for 58 months and that creditors will get roughly 50p per £ owed. There is a long list of secured creditors and an even longer list of unsecured creditors, which is what we are.
I'm assuming that we may not see this money for a long time? It won't break us by any means but I've no experience of knowledge of this.
So if you are owed £1,160 (makes the maths easy) they will pay £580 in total, £10 a month for almost 5 years.
You can attend the meeting if you want, but your vote only counts for the value of the amount you are owed compared to the total creditors bill - HMRC (VAT and PAYE) and the bank are usually the biggest creditors, and if 75% by value of the creditors approve the Arrangement then it is done.
If the vote is defeated, the company will probably go into administration and you won't get a penny after the secured (bank) and preferred (HMRC) creditors are paid off.
That is interesting regarding preferential status of the creditors, as the paperwork clearly refers to preferential status of some creditors.
We are owed very little in the scheme of things and I hope very much that they do not go into administration.
Thanks for your posts. We aren't going to go to the meeting, but I will fill in the forms and post them back. I feel very sorry for them. It felt rather intrusive reading through their accounts, debts and creditors.