Liquidator’s First Annual Progress Report Pursuant to ... · PDF file05/04/2013 · S:\INSOLV\INS-CASE\P\PowerPlan\Isle of Man Liquidation\Annual Reports\2013 04 03 Annual Progress

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Tel: 020 3298 0830

PowerPlan Company Limited (In Liquidation)

Company Number: 090015C

Liquidator’s First Annual Progress Report Pursuant to Section 232 of the Isle of Man Companies Act 1931

1. INTRODUCTION

1.1. Douglas MacDonald was appointed as Administrator over the PowerPlan Company Limited (“PowerPlan”) (“the Company”) on 1 September 2003.

1.2. The appointment as Administrator was made in accordance with the UK Insolvency Act 1986. The

Manchester High Court recognised the Centre of Main Interests of the Company being within the UK and was satisfied the Administration Order and appointment could be made.

1.3. On the 25 February 2011 the Administration Order was discharged by the Manchester High Court

who then immediately ordered the Company be placed into Liquidation.

1.4. The Compulsory Winding Up Order was made on the same date and Douglas MacDonald was appointed as Liquidator under the UK Insolvency 1986.

1.5. An Isle of Man Companies Act Receiver held office at that time. As a result of the Winding Up

Order the Receiver resigned his appointment.

1.6. On 23 February 2012 Douglas MacDonald of The MacDonald Partnership Plc was then also appointed as Liquidator of the Company under the Isle of Man Companies Act provisions. The Liquidation is a Creditors Voluntary Liquidation.

1.7. The UK Insolvency Act 1986 and Isle of Man Liquidation procedures are running in parallel with

the UK Insolvency Act as the lead process.

1.8. An Isle of Man Committee of Inspection is in place to assist the Liquidator. The members of the Committee of Inspection are the same members of the Liquidation Committee under the UK Insolvency Act Liquidation.

1.9. The purpose of this report is to summon meetings of members and creditors and to lay an account

before the members and creditors of the Liquidator’s acts and of the conduct of the Liquidation during the preceding year.

2. PROGRESS OF LIQUIDATION

2.1. The history and background of this Company is complex.

2.2. The Company was originally established as a Service Contract Provider.


Tel: 020 3298 0830

2.3. The Liquidator has been engaged since 2003 in making realisations, investigating the affairs of the Company together with the way in which it operated within the PowerPlan scheme. The Liquidator has recently made additional claims on PowerPlan’s insurer called Powerhouse Realisation Limited (“PIL”). PIL is itself in Liquidation. The PIL Liquidator has provisionally accepted this claim.

2.4. Returns made to date

2.4.1. The following returns have been made since 2003, during the Administration of the

Company.

Cashback claims paid £4,624,396.61 Repairer claims paid £325,815.96 Repair claims paid £545,355.31

2.5. In 2010 the Liquidator had cause to commence a detailed second round investigation, the results

of which may lead to further recoveries for creditors.

2.6. The Liquidator has been in discussion with various parties, including the Isle of Man Customs & Excise, with a view to making further recoveries into the Liquidation.

2.7. Due to various settlement agreements, entered into prior to the appointment of the Liquidator

under the Isle of Man Companies Act, the Liquidator does not believe it is appropriate to include details within this report.

3. RECEIPTS AND PAYMENTS ACCOUNT

3.1. A summary of my Receipts and Payments account from 23 February 2012 to 22 February 2013 is attached to this report.

3.2. As the UK insolvency is the lead insolvency, sanction has been obtained from the Secretary of

State to operate a local bank account for the purposes of trading activity. All other funds are paid into the Insolvency Services Account (“ISA”) in compliance with the Insolvency provisions.

3.3. As Liquidator I held £3,009.90 at the date of this report in the ISA account. These funds will be

applied for the immediate purposes of the Liquidation.

3.4. The balance in the local bank account at the date of this report was £110.22. 4. LIABILITIES

4.1. Secured Creditors

4.1.1. No creditors hold security over the company.

4.2. Preferential Creditors

4.2.1. There are no preferential creditors.


Tel: 020 3298 0830

4.3. Unsecured Creditors

4.3.1. There are a substantial number of unsecured creditors. As the company was a services contract provider the profile of the vast majority of creditors is the same. These creditors are retail customers who purchased extended warranty and cashback products.

5. LIQUIDATOR’S REMUNERATION

5.1. A description of the routine work undertaken in the Liquidation to date is as follows:

5.1.1. Administration and Planning

Preparing the documentation and dealing with the formalities of appointment.

Statutory notifications and advertising.

Preparing documentation required.

Dealing with all routine correspondence.

Maintaining physical case files and electronic case details on IPS.

Review and storage.

Case planning and administration.

Preparing reports to members and creditors.

Convening and holding meetings of members and creditors.

5.1.2. Cashiering

Maintaining and managing the Liquidator’s cashbook and bank account.

Ensuring statutory lodgements and tax lodgement obligations are met.

5.1.3. Creditors

Dealing with creditor correspondence and telephone conversations.

Preparing reports to creditors.

Maintaining creditor information on IPS.

Reviewing and adjudicating on proofs of debt received from creditors.

5.1.4. Asset Realisations and investigation

Realisation of assets and on-going investigation into the complex affairs of this company.

5.2. Fees drawn in the Liquidation to date amount to £259,103.33, all of which relate to unpaid fees incurred during the Administration of the Company. In the year from 23 February 2012 to 22 February 2013 the fees amounted to £46,855.33. The fees have therefore been disclosed as Administrator’s fees in the Receipts & Payments account.

5.3. The Committee of Inspection has approved the method under which the Liquidator is to be

remunerated in this Liquidation. This mirrors the resolution of the Liquidation Committee in the UK Insolvency Act Liquidation. The Liquidation Committee had previously approved the remuneration of the Administrator of the Company.


Tel: 020 3298 0830

6. LIQUIDATOR’S DISBURSEMENTS

6.1. Category 1 disbursements (payments to independent third parties that do not require creditors’ consent are as follows):

6.2. During the Liquidation the following professional advisors, including subcontractors, were used:

Name Services Provided Fee Basis Bird & Bird Legal Services Hourly rate & disbursements Chan Law Corbridges Paul Downes QC DWF KPMG Mark Phillips QC Taylor Vinters

Legal Services Receiver’s Services Legal Services Legal Services Corporation Tax Services Legal Services Legal Services

Hourly rate & disbursements Hourly rate & disbursements Hourly rate & disbursements Hourly rate & disbursements Hourly rate & disbursements Hourly rate & disbursements Hourly rate & disbursements

6.3. Category 2 disbursements are those which, whilst being in the nature of expenses or

disbursements, include elements of shared or allocated costs. In the year from 23 February 2012 to 22 February 2013 the Category 2 disbursements amounted to £3,490.65. None of these disbursements have been charged to the Liquidation.

6.4. The Committee of Inspection (and Liquidation Committee) has also approved the basis for

recharging all categories of disbursements.

6.5. I have attached additional information in relation to the firm’s policy on staffing, use of subcontractors, disbursements and details of our current charge-out rates by staff grade.

7. MEETINGS OF MEMBERS AND CREDITORS

7.1. I am required to summon meetings of members and creditors in compliance with the Isle of Man Companies Act 1931.

7.2. The purpose of the meetings of members and creditors is to lay a copy of this report to the

meetings and respond to queries that may be raised.

7.3. For the purposes of creditors’ convenience and cost I propose holding the meetings at The Millennium Hotel, George Square, Glasgow G2 1DS.

Description Total amount incurred from 23/2/12 to 22/2/13

Amount reimbursed Amount still to be reimbursed

Bordereau Fee £1,670.00 £350.00 £1,320.00 Room Hire £90.00 £90.00 - Statutory Adverting £6,112.34 £6,112.34 - Company Searches £13.65 - £13.65 Receiver’s Fees £797.00 - £797.00 Legal Fees £3,000.00 £3,000.00 - Travel £4,797.34 £4,670.74 £126.60 Postage £122.66 £79.49 £43.17 Website Maintenance £770.00 £770.00 -

£17,372.99 £15,072.57 £2,300.42


Tel: 020 3298 0830

7.4. I have attached hereto, copies of the relevant notice summoning the meeting of creditors.

7.5. You are not required to attend in person. If you wish for another party to represent you at the meeting you are required to complete the attached Proxy form and submit it to me by 12:00 noon on previous working day before the date of the meeting. In this case 23 July 2013.

7.6. You may wish to attend in person in which case I would also ask you to submit the attached Proxy form and return it to me by 12:00 noon on previous working day before the date of the meeting.

In the meantime if you have any queries please do not hesitate to contact my office on 020 3298 0830.

Douglas MacDonald Liquidator 3 April 2013


Tel: 020 3298 0830

Appendix 1

Receipts and Payments Account

(In Liquidation)

23 February 2012 to 22 February 2013

RECEIPTS Total (£)

Brought Forward 452,706.70

VAT Recoveries (net) 3,619,855.41

Third Party Funding 51,226.39

Bank Interest Net of Tax 16.72

Bank Charges 200.00

VAT Receivable 8,149.90

4,132,155.12

PAYMENTS

Brought Forward 449,760.10

Tresso Trading - Claims Processing (net) 3,609,355.41

DTI Cheque Fees 19.30

Sec of State Fees 7,699.61

Bordereau 350.00

Administrator's Fees 46,855.33

Creditors' Committee Expenses 15.80

Room Hire 90.00

Legal Fees 3,000.00

Website Maintenance 770.00

Postage 79.49

Travel 4,670.74

Statutory Advertising 6,112.34

Bank Charges 89.78

Cashback Claims 167.10

4,129,035.00

Balance in Hand 3,120.12

4,132,155.12

Page 1 of 1 03 April 2013

PowerPlan Company Limited


Tel: 020 3298 0830

Appendix 2

TMP’s Billing Policy and charge out rates

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THE MACDONALD PARTNERSHIP PLC

FEES, DISBURSEMENTS AND EXPENSES POLICY

INTRODUCTION The MacDonald Partnership Plc is a specialist firm of licensed Insolvency Practitioners.

As a result, we have very specific and specialist billing structures. This schedule sets out our terms and conditions of billing to clarify the position.

GENERAL PHILOSOPHY

It is important to stress that the general philosophy of the firm’s billing structure is as follows

1. To provide

(i) The highest possible quality in terms of (a) technical excellence

(b) delivery of service.

(ii) The highest possible level of integrity and professionalism.

(iii) A personal service.

2. To provide value for money and to reflect the need for a reasonable profit and return in providing our services.

Given this, it is important to set a basic and reasonable pricing and billing structure to maximise the combined interests of our clients, third parties (such as banks and creditors) and the firm.

VARIATION FROM OUR BILLING STRUCTURE

The billing structure has been created to reflect the economic substance of providing the quality of service that we give.

To charge lower or different fees would be unprofitable for the firm. We will therefore only allow variations from our billing structure in extreme circumstances. Any such variation must be approved by either one of the managing or finance directors.

DEFINITIONS

FEES Fees are the time charges that reflect the time spent on a case by a partner, director or staff member of the firm. Our general approach to resourcing our assignments is to allocate staff with the skills and experience to meet the specific requirements of the case. The exact constitution of the case team will depend on the anticipated size and complexity of the assignment. With regard to support staff, we advise that time spent by cashiers and other support staff in relation to specific

tasks on an assignment is charged. All activity on cases is charged and recorded in six minute increments.

In corporate recovery and insolvency cases fees can be charged on a time cost basis, a set fee basis, on a percentage of the assets realised and distributed or a mixture of the above. The fees charged are based on the Scale Rates charges (which are detailed below).

A schedule of Charge Out Rates applies to each grade of staff and is available for inspection at any time.

PROFESSIONAL ADVISORS

We use professional advisors on some of our assignments. The basis of our fee arrangements with advisors, which is subject to review on a regular basis, is generally on an hourly rate basis plus disbursements. Fixed fee arrangements will be disclosed where applicable. Our choice of professional advisors is based on our perception of their experience and ability to perform the type of work required, the complexity and nature of the assignment and the basis of our fee arrangement with them.

DISBURSEMENTS & EXPENSES

For the purposes of compliance with Statement of Insolvency Practice 9 (SIP 9) and R3’s best practice guidelines, disbursements and expenses are split into two categories.

Category 1 Disbursements

Generally comprise those external supplies of incidental services specifically identifiable to a specific job or case. (including agents, insurances, as well as other outsourced services such as room hire, statutory advertising, court fees, couriers, postage, printing, travel and document storage).

Category 2 Disbursements

Generally comprise costs, which whilst being in the nature of expenses or disbursements, include elements of shared or allocated costs. Such disbursements are listed below.

1 Binders £1.15 Per item

2 Car £0.50 Per mile

3 Copies (black) £0.15 Per page

4 Dividers £1.00 Per item

5 Envelopes £0.10 - £0.15 Per item

6 Files £6.00 Per item

7 Labels £0.25 Per sheet

8 Letters £2.20 Per letter

9 Printouts £0.20 Per page

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AGREEMENT OF FEES, DISBURSEMENTS AND

EXPENSES

CORPORATE RECOVERY AND INSOLVENCY

For corporate recovery and insolvency work, the following fee structure applies. For this specialist type of work, fees can either be charged on a time basis or on a scaled percentage charge of assets realised and distributed. Unless otherwise stated, all corporate recovery and insolvency work is done on a time basis.

1. Pre-appointment work

Pre-appointment work includes (for example)

(1) Nominees fees in individual and company voluntary arrangements.

(2) Assistance and preparation in holding a section 98 meeting.

(3) Assistance in placing a company into administration.

(4) Investigation work prior to a formal insolvency procedure, or general advisory work.

Pre-appointment work will be charged on the following basis

(1) Fees will be agreed with the firm’s client in advance.

(2) A standard engagement letter will be produced and it will refer to the fees, disbursements and expenses policy, as a source of reference.

(3) In cases where (due to urgency or unusual circumstances) no engagement letter has been drawn up, all fees will be charged according to this schedule.

2. Post appointment work

Post appointment work includes all work done as required by the Insolvency Act 1986 (as amended) and by the Insolvency Rules 1986 (as amended).

All post appointment fees and disbursements must be approved by

(1) a general meeting of creditors, or

(2) a meeting of a creditor or liquidation committee, or

(3) both of the above, or

(4) where there is a disagreement on the level of fees, by the procedure available in the Insolvency Rules 1986 (as amended).

(5) in the case of an administrative receivership, by the debenture holder.

3. Scale charges

Where fees are taken on a realisation basis (other than a time charge basis) the scale charges are charged on the basis of the Scale Charges laid out in schedule 6 of the Insolvency Rules 1986, which is detailed as follows.

The realisations scale

(i) On the first £5,000 or fraction thereof… 20%

(ii) On the next £5,000 or fraction thereof… 15%

(iii) On the next £90,000 or fraction thereof…

10%

(iv) On all further sums realised… 5%

The distribution scale

(i) Of the first £5,000 or fraction thereof… 10%

(ii) On the next £5,000 or fraction thereof… 7½%

(iii) On the next £90,000 or fraction thereof…

5%

(iv) On all further sums realised… 2½%

4. Realisation and distribution for secure creditors

The realisation and distribution fees for any secured creditor (other than an appointing debenture holder) are based on the Official Receivers scale charges as detailed above.

MAINTENANCE OF RECORDS

The MacDonald Partnership Plc maintains complete records on both time recording, disbursements and expenses to ensure accuracy of charges.

DATA PROTECTION

Confidentiality of information is an important concern for The MacDonald Partnership Plc. We are registered and comply with the data protection laws of the United Kingdom. Information about clients and creditors are held on databases. If you wish to know what information we hold about you please write to The Data Protection Officer, The MacDonald Partnership Plc, 4

th Floor, 100

Fenchurch Street, London, EC3M 5JD to request details.

MONEY LAUNDERING

The MacDonald Partnership Plc is required, by law, to assist the authorities in eradicating the laundering of proceeds of illegal activity. We may therefore ask certain questions in respect of the source of funds or other monies provided, as well as the identification of clients. We may also be required, in certain circumstances, to report to the relevant authorities on any suspicious activity. We are not required to inform any party of any report made about them.

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THE MACDONALD PARTNERSHIP PLC

CHARGE OUT RATES

Effective date

The charge out rates are effective from 1st October 2010.

Charge out rates

Title Grade Rate

£ph

Partners 1.1 575

1.2 475

1.3 375

Managers 2.1 350

2.2 275

2.3 225

Administrators 3.1 110

3.2 95

3.3 80

Support Staff 4.1 55

4.2 50

4.3 45


Tel: 020 3298 0830

Appendix 3

Notice of Meeting of Creditors


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POWERPLAN COMPANY LIMITED (Compulsory Liquidation under UK Insolvency Act 1986) (Creditors Voluntary Liquidation under IOM Companies Act 1931)

Company Number: 090015C Nature of Business: Provision of Service Contracts Principal Trading Address: The MacDonald Partnership Plc, 4

th Floor, 100 Fenchurch Street, London, EC3M

5JD

NOTICE IS HEREBY GIVEN pursuant to section 232 of the Companies Act 1931 that a Meeting of Creditors of the above-named company will be held at The Millennium Hotel, George Square, Glasgow G2 1DS on 24 July 2013 at 14:00hrs for the purpose of laying an account before the creditors of the Liquidator’s acts and of the conduct of the Liquidation during the preceding year. Forms of proxy are available. Creditors wishing to vote at the Meeting should lodge their proxy, with The MacDonald Partnership Plc, 4

th Floor, 100 Fenchurch St, London, EC3M 5JD not later than 12:00 noon on

23 July 2013. 3 April 2013

121

No. 80 (Rule 124)

GENERAL PROXY

POWERPLAN COMPANY LIMITED (IN LIQUIDATION)

I/We, __________________________________ of _______________________________, a creditor

[or contributory] hereby appoint (1) ____________________________________ to be my/our general

proxy to vote at the Meeting of Creditors [or Contributories] to be held in the above matter on the

____________ day of ____________________ 20___, or at any adjournment thereof.

Dated this ______________ day of _________________ 20___

[Signed] (2)

NOTES

(1) The person appointed general proxy may be the Official Receiver, the Liquidator, or such other

person as the creditor [or contributory] may approve, and the proxy form when signed must be lodged

by the time and at the address named for that purpose in the notice convening the meeting at which it

is to be used.

(2) If a firm sign the firm’s trading title, and add “by A B, a partner in the said firm”. If the appointer is

a corporation, then the Form of Proxy must be under its Common Seal or under the hand of some

officer duly authorised in that behalf, and the fact that the officer is so authorised must be stated thus-:

For the ____________________________ Company

(duly authorised under the seal of the Company)

Certificate to be signed by person other than Creditor [or Contributory] filling up the above proxy

I, ___________________________________ of ___________________________________, being a

(a) ________________________________ hereby certify that all insertions in the above proxy are in

my own handwriting, and have been made by me at the request of the above named and in his

presence, before lie attached his signature [or mark] thereto.

Dated this ______________ day of ____________________ 20___

Signature

In a voluntary winding up the Liquidator or if there is no Liquidator the chairman of a meeting may but

the Official Receiver may not be appointed proxy. The proxy form will be altered accordingly.

(a) Here state whether clerk or manager in the regular employment of the creditor or contributory or a commissioner to administer oaths.

Documents

Liquidator’s First Annual Progress Report Pursuant to ... · PDF file05/04/2013 · S:\INSOLV\INS-CASE\P\PowerPlan\Isle of Man Liquidation\Annual Reports\2013 04 03 Annual Progress