Diary of an IP - Update at 19 March 2008
Another week on, and perhaps the highlight for me (outside of the insolvency world) was to be at the Millenium Stadium on Saturday to see my beloved Welsh Rugby team complete the Grand Slam for the second time in four years! The atmosphere in the stadium was absolutely electric, and the singing was tremendous in traditional Welsh form. It is estimated that over 250,000 people were in Cardiff for the game, which is almost the same amount as our population!
Now turning to the world of insolvency, there has been much comment this week about the effect of the transfer of appointments from Debtmatters to Grant Thornton and Payplan. I have limited personal knowledge of the way Debtmatters was run, or the standard of work carried out, but with both incoming firms taking the step to vary all cases, this leads us to assume that there may be inefficiencies in the old system which need to be dealt with - for the benefit of both debtor and creditors. At at time when our profession is under such scrutiny - particularly with regard to fee income - this attention is less than favourable.
My own view is that more IVA portfolios will be sold, as the larger “factory” based companies will struggle to maintain their cost bases on the very significant drop in fee income imposed by creditors over the last few months. We are all feeling this badly, but the stronger, more specialist firms may be sufficiently capitalised and efficiently run to withstand such pressure. Let’s hope so!
What would be helpful would be if creditors could agree on the basis of fees. I am now seeing at least six different fee structures being imposed by creditor representatives, which often conflict - it is as if the voting representatives are all playing tag with each other and trying to say theirs is better than the others. Can we please get to the stage where we are either going with fixed fees or percentage based realisations? Either is fine in my book - but we have to be paid a reasonable rate for the lower end cases to justify continuing to take them on. This either has to be funded on the basis of agreed fixed costs - or the upper benchmark on fees has to be removed.
A personal triumph this week was to receive a final settlement for poster MikeS from the forum who has been a client of mine since the end of last year. Initially referred to me as an IVA, it soon became apparant that Mike’s interests were best served by the offering of an informal settlement - something that I do not do a lot of, but Mike was such a nice guy (and he brought Jaffa Cakes!) it just felt the right thing to do. One of my colleagues, Hywel Casling, deserves full credit for achieving the settlement, which took some time (as they always do!) to broker - simply because finding a decision maker is not easy when you are offering an informal settlement. Mike sold his family home to enable monies to be made available, but is now happily living with his family in a nice rented property, and is concentrating on building his business back up as he now feels he is directly benefitting from those efforts. Well done to Mike and all others who do not give up hope of eventually getting there!
I cannot believe it is Easter already - it only seems 5 minutes since Christmas, and isn’t it early this year! We have cold weather and snow predicted for the holiday weekend in Wales, so I shall be curling up with some chick-flicks and relaxing - checking the forum occasionally of course. I have a creditors meeting on Good Friday (we take Monday and Tuesday off instead!) for a very special client who is very worried about his position at the moment, so if anyone is reading this over the next few days, please send positive thoughts for him - and especially his wife who is not doing an IVA but is also very worried. If only some of the creditors could see the stress they put some people through, they might think twice about lending the money in the first place - but I guess we do have to measure irresponsibility in borrowing as well as lending.
Looking foward to the Frugal Friends meet in Birmingham in a week or so - it seems that there are going to be a few members there. It will be great to put names to faces, actually meet some of my own clients, and check out whether my thought pictures of some of the regular forum posters bear any resemblance. I feel that I really know Skippy and Aguise so well, as they have been posting on the forum for longer than me, so it should be a good night. And I am contributing to the food and drink - so make sure you bring appetities if you are attending.
