DS employer now insolvent

[Growingexponentially]

Sorry, this is quite long to try and ensure I include all information.

My son has ASD (the reason he has come to me for help rather than dealing with it himself) and has been working for an independent store and running their website for 2.5years. The business is too big for the government grants but banks won't give a loan as its not financially viable.

My son was told on 21/03 that all staff were being furloughed and the store was temporarily closing. After failing to procure any financial assistance the owner had to reluctantly tell all staff that they were being made redundant due to insolvency on 15/04.

3 letters have been sent to DS from insolvency practitioners and we're not really sure what to do. The first letter told him to claim redundancy and notice pay from the government. He did that and has received confirmation that his request has been received and will be dealt with within 6 weeks.

In the mean time more letters arrived. The most recent (received on Saturday) gives him until the end of today to submit a Creditor's Statement of Claim. The other staff are all ignoring this, but it says on the paperwork that staff are preferential creditors and that the business owner is receiving an HMRC Refund (Furlough).

Is it possible for anybody to tell me whether DS should claim his wages for the time between the store closing and being made redundant? I've googled extensively but I'm obviously not typing the right thing because I can't find any information.

your son will be able to claim the following from the Redundancy payments service:

• arrears of wages (this will be anything he is owed until the date of notice at his usual hours and pay).
• holiday pay
• pay in lieu of notice (this will be reduced by any wages earned from a new employer in the notice period)
• redundancy pay based on age and length of service.

The insolvency practitioner should help him but may not, he needs to complete an RP1 form (sounds like he has done if he has heard from the RPS). He will then get another form at the end of his notice period to complete.

He doesn’t need to claim from the insolvency unless he earns over the stat minimum as the RPS essentially takes his place in the insolvency.

If you are unsure on anything then maybe either contact the IP or the RPS for help.

@Mrsrobinson247 you clearly have a lot of experience and / or expertise in this area. Just a thought for the OP though, with a stated deadline of today, would there be any adverse reason for not completing a Creditor's Statement of Claim to cover all angles?

The deadline for the submission of the claim will be to vote at a creditors meeting (presumably to accept either the nomination of a liquidator or accept administrators proposals depending on the process). I wouldn’t bother submitting a proof of debt, if you have the time and Info to calculate the claim and get it in today then you can do but it won’t have any impact on what your son is paid at this stage.

The only other reason to submit a claim is if your son wants to sit on a creditors committee (unusual to have one but it is possible - they get updated more regularly on the process of the insolvency and involved in some decisions).

If he does earn over the stat amount the IP should calculate the balancing claim but it may be worth submitting a proof of debt - you will get a notice to pay a dividend which will give the final deadline for claims.

Thank you so much! I've spent hours trying to find this information. You've been so helpful.

He should claim for both, just in case. Belt and braces. Creditors claim won’t be much paperwork (RPS claim is!)