Professional Services
Forvismazars
Full Credential Description
The case study focuses on an egg producer and supplier that faced significant challenges following the cessation of its business operations prior to the appointment of an administrator. With no buyer for the business and a bleak outlook for unsecured creditors, the situation appeared dire. Upon appointment, the administrator took immediate action to secure two insurance policies that were at risk of lapsing. This decision was based on a thorough analysis of the potential benefits of retaining the policies in the event of a default. When a default event did occur, the administrator successfully recovered approximately £203,000 through these policies. Additionally, the administrator identified and pursued a potential third-party claim, which resulted in a successful settlement. This settlement yielded a cash recovery of around £297,000 and led to the resolution of several secured and unsecured creditor claims, including the settlement of a secured creditors claim of £386,000 and the withdrawal of various subrogated claims totaling £228,000. Overall, the proactive approach taken during the administration resulted in a total financial benefit of approximately £1.17 million for the insolvent estate. This enabled significant distributions to be made to multiple classes of creditors. Preferential creditors received a full distribution of £18,000, while secured creditors with claims of £429,000 were also settled in full. Unsecured creditors, whose claims were reduced to £860,000 due to the withdrawal of £245,000 in claims, received a distribution of £452,000, equating to approximately 52 pence in the pound. This outcome was notably beneficial, particularly for the unsecured creditor class, which received an unexpected dividend distribution.