Potenital conflict of interest with a bank and an IP
Discussion
HI all,
I wanted to get relevant peoples views on a situation.
Company "A" has an Invoice Discount facility and a loan in place with a Bank "B"
A is up to date on loan repayments but needs extra funding to get through a cashflow bump ( Xmas trading)
B puts in an IP "C" to do a cashflow analysis.
C provides a damning assessment of the business despite there being a clear turnaround in week one of Feb and the whole thing underwritten with property assets
B appoints C to be the IP of A with immediate effect. Despite A signing a notice of intention giving them 10 days protection from creditors.
This was a few years ago and has now washed through, however, surely there would be a conflict of interest in the bank appointing the people that did the cashflow analysis as the Administrators?
The Crown Insolvency subsequently decided the director of A was not at fault, and that the companies should not have been put into administration as the bank received all of their money back from the administration and the sale ( well below market value ) of the properties which were held as security.
Looking at it, it looks like the bank and the IPs were in cahoots with the bank fasttracking the administration of the business and selling the assets under market value also the bank could recoup their money but more importantly the administrators could rock up a 400k bill in fees.
Has anyone been in a similar situation or can advise on whether there is a clear conflict of interest and potential breach of any financial regulations?
TIA
I wanted to get relevant peoples views on a situation.
Company "A" has an Invoice Discount facility and a loan in place with a Bank "B"
A is up to date on loan repayments but needs extra funding to get through a cashflow bump ( Xmas trading)
B puts in an IP "C" to do a cashflow analysis.
C provides a damning assessment of the business despite there being a clear turnaround in week one of Feb and the whole thing underwritten with property assets
B appoints C to be the IP of A with immediate effect. Despite A signing a notice of intention giving them 10 days protection from creditors.
This was a few years ago and has now washed through, however, surely there would be a conflict of interest in the bank appointing the people that did the cashflow analysis as the Administrators?
The Crown Insolvency subsequently decided the director of A was not at fault, and that the companies should not have been put into administration as the bank received all of their money back from the administration and the sale ( well below market value ) of the properties which were held as security.
Looking at it, it looks like the bank and the IPs were in cahoots with the bank fasttracking the administration of the business and selling the assets under market value also the bank could recoup their money but more importantly the administrators could rock up a 400k bill in fees.
Has anyone been in a similar situation or can advise on whether there is a clear conflict of interest and potential breach of any financial regulations?
TIA
There was an FCA investigation into this sort of thing a couple of years ago - all found to be ok :/
Also a leak of internal docs showing deliberate policy of forcing companies under. dont think it was wikileaks, dont remember where but bbc might have been involved.
Lloyds and RBS were the main culprits, especially GRG dept in RBS.
Also a leak of internal docs showing deliberate policy of forcing companies under. dont think it was wikileaks, dont remember where but bbc might have been involved.
Lloyds and RBS were the main culprits, especially GRG dept in RBS.
TooLateForAName said:
There was an FCA investigation into this sort of thing a couple of years ago - all found to be ok :/
Also a leak of internal docs showing deliberate policy of forcing companies under. dont think it was wikileaks, dont remember where but bbc might have been involved.
Lloyds and RBS were the main culprits, especially GRG dept in RBS.
Thank youAlso a leak of internal docs showing deliberate policy of forcing companies under. dont think it was wikileaks, dont remember where but bbc might have been involved.
Lloyds and RBS were the main culprits, especially GRG dept in RBS.
Yes i heard about the RBS thing on the news.
interesting.
https://www.theguardian.com/business/2009/jan/27/p...
"At this point, only the administrators have their fees guaranteed."
https://www.theguardian.com/business/2009/jan/27/p...
"At this point, only the administrators have their fees guaranteed."
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